(Corp Finance) Effective Tax Rate, Split-rate corporate tax individual, corporate, effective, question, applies

mfleming1983

Hi all,
Please kindly show me how to approach this question. I am very confused…
Thanks!
International Pulp, a Swiss-based paper company, has annual pretax earnings (in Swiss francs) of SF 600. The corporate tax rate on retained earnings is 55%, and the corporate tax rate that applies to earnings paid out as dividends is 30%. Furthermore, International Pulp pays out 30% of its earnings as dividends, and the individual tax rate that applies to dividends is 40%.
What is the effective tax rate on corporate earnings paid out as dividends?
A)
70%.
B)
48%.
C)
58%.
Ans: C