The Chester Corporation has $250,000 of taxable income. It distributes $100,000 of that income as a dividend to its sole shareholder who has $490,000 of other taxable income that places him in the 39.6 percent marginal tax bracket. What is the effective tax rate on the corporation’s $250,000 of taxable income?

a. 34 percent

b. 35 percent

c. 41.8 percent

d. 47.7 percent