USCorporation Owns 45% of the Stock of Foreign Corporation

Multiple Choice

U.S.Corporation owns 45% of the stock of Foreign Corporation.Foreign Corporation is incorporated in Country T.In its first year of operations,Foreign Corporation earns 60,000 frugs of E&P,pays a 40,000- frug dividend,and pays 5,000 frugs in income taxes.The exchange rate between the dollar and the frug is: first year average,1 frug = $0.20; yearend,1 frug = $0.25; tax payment date,1 frug = $0.30; and dividend payment date,1 frug = $0.28.What is the translated dividend amount?

A) $5,400
B) $4,500
C) $5,040
D) $3,600