The Spanish Subsidiary of a U

The Spanish subsidiary of a U.S. MNE had taxable income of €10,000,000 and paid taxes (at 35 percent) of €3,500,000, so its net operating income was €6,500,000. It paid a cash dividend of €4,000,000 to its U.S. parent. How much tax, if any, is owed to the U.S. government if the U.S. tax rate is 40 percent and the exchange rate is $1.2100/€?

A) $307,692
B) $372,307
C) $846,154
D) $1,023,846
E) None of the above.