Riverbend Inc. received a $200,000 dividend from stock it held in Hobble Corporation. Riverbend's taxable income is $2,100,000 before deducting the dividends received deduction (DRD), a $40,000 NOL carryover, and a $100,000 charitable contribution. Use Exhibit 16-6. (Round your tax rates to 1 decimal place. Leave no answer blank. Enter zero if applicable.)

a. What is Riverbends deductible DRD assuming it owns 10 percent of Hobble Corporation?

Answer $100,000

200,000 X 50%= $100,000

b. Assuming the facts in part (a), what is Riverbends effective tax rate on the dividend?

c. What is Riverbends DRD assuming it owns 60 percent of Hobble Corporation?

d. Assuming the facts in part (c), what is Riverbends marginal tax rate on the dividend?

e. What is Riverbends DRD assuming it owns 85 percent of Hobble Corporation (and is part of the same affiliated group)?

f. Assuming the facts in part (e), what is Riverbends marginal tax rate on the dividend?

EXHIBIT 16-6 Stock Ownership and Dividends Received Deduction Percentage Dividends Received Deduction Percentage 50% 65 Receiving Corporation's Stock Ownership in Distributing Corporation's Stock Less than 20 percent At least 20 percent but less than 80 percent 80 percent or more22 100 EXHIBIT 16-6 Stock Ownership and Dividends Received Deduction Percentage Dividends Received Deduction Percentage 50% 65 Receiving Corporation's Stock Ownership in Distributing Corporation's Stock Less than 20 percent At least 20 percent but less than 80 percent 80 percent or more22 100