Pink corporation has two shareholders

Assignment Help Finance Basics

Reference no: EM131023518

Pink Corporation acquired land and securities in a § 351 tax-free exchange in 2011. On the date of the transfer, the land had a basis of $720,000 and a fair market value of $1 million, and the securities had a basis of $110,000 and a fair market value of $250,000. Pink Corporation has two shareholders, Maria and Paul, who are unrelated. Maria owns 85% of the stock in the corporation, and Paul owns 15%. Pink adopts a plan of liquidation in 2012. On this date, the value of the land has decreased to $500,000. What is the effect of each of the following on Pink Corporation? Which option should be selected?

Reference no: EM131023518

Questions Cloud

Problem regarding the government failure mean : What does government failure mean in this context? How does public choice theory help us to understand how government could fail systematically?

The product of two rational numbers is a rational number : The product of a rational number and an irrational number is an irrational number.

What is the dividend yield : Company B just paid an annual dividend of $.42 a share. The stock is selling for $18 a share and has a growth rate of 2.2 percent. What is the dividend yield, using the constant growth model?

Assumption for understanding government policy : An article in the Economist magazine made the following observation: "Public-choice economics assumes that government figures are merely human." What are the implications of this assumption for understanding government policy?

Pink corporation has two shareholders : Pink Corporation acquired land and securities in a § 351 tax-free exchange in 2011. On the date of the transfer, the land had a basis of $720,000 and a fair market value of $1 million, and the securities had a basis of $110,000 and a fair market valu..

What other factors should best trim consider : What is the opportunity cost of interest forgone from purchasing all 204,000 units at the start of the year instead of 12 monthly purchases of 17,000 units per order?

What is the number of unemployed in this economy : Suppose now, that the government implements a minimum wage rate of $70 per week. Given this information, what is the number of unemployed in this economy

What is the yield-to-maturity : A 7.5 percent coupon bond issued by Company Y has a face value of $1,000, pays interest semi-annually, has 8 years to maturity, and sells for $996.34. What is the yield-to-maturity?

Accurate predictor of the outcomes : Briefly explain whether you agree with the following argument: The median voter theorem will be an accurate predictor of the outcomes of elections when a majority of voters have preferences very similar to those of the median voter.

User Account

All Pages