What is the type of gain or loss on the sale transaction

Assignment Help Financial Management

Reference no: EM131448269

Arthur owned 4, 200 shares of common stock of the Kyle Corporation common shares which he had purchased in 2008 for dollar 10 per share. In July of 2016, Kyle Corporation distributed non-taxable rights (one right for each share owned) to purchase additional shares at dollar 15 per share. At the date of the distribution, the fair value of the stock was dollar 30 per share and the fair value of each right was dollar 12. In December 2016, Arthur sold all of the rights for dollar 63,000. What is the realized and recognized gain or loss and what is the type of gain or loss on the sale transaction?

Reference no: EM131448269

Questions Cloud

What is the current value of ibms stock : IBM has just paid a dividend of $4 per share (this dividend is already paid sometimes called Dividend 0). It is estimated that the company's dividend will grow at a rate of 35% in year 1 and 20% in year 2. The dividend is then expected to grow at a..

How might both parties gain from a lease transaction : Is leasing a zero-sum game in the sense that any gain to the lessee is a cost to the lessor?If not, how might both parties gain from a lease transaction? In your answer, explain how the lessee and the lessor analyze the situation, why they might use ..

What is a capital market : What is a capital market? Are there different capital markets? How does a cost-efficient capital market help reduce the price of goods and services?

How long will it be before you have enough to buy the car : You're trying to save to buy a new $195,000 Ferrari. You have $45,000 today that can be invested at your bank. The bank pays 5.3 percent annual interest on its accounts. How long will it be before you have enough to buy the car?

What is the type of gain or loss on the sale transaction : Arthur owned 4, 200 shares of common stock of the Kyle Corporation common shares which he had purchased in 2008 for dollar 10 per share. In July of 2016, Kyle Corporation distributed non-taxable rights (one right for each share owned) to purchase add..

Make annual investments in fund : Suppose you make 30 annual investments in a fund that pays 3% compounded annually. If your first deposit is $5,500 and each successive deposit is 3% greater than the preceding deposit, how much will be in the fund immediately after the 30th deposit?

What is the internal growth rate : The most recent financial statements for Shinoda Manufacturing Co. are shown below: Income Statement Balance Sheet Sales $ 63,600 Current assets $ 25,000 Debt $ 41,200 Costs 44,980 Fixed assets 77,900 Equity 61,700. The company maintains a constant 3..

Two old cash sayings-cash is king and cash is everything : There are two old cash sayings,"Cash is king" and "Cash is everything when you need it, but nothing when you have it" Describe your understanding of these statements in business, cross examine these two statements and then apply these concepts to rea..

Finances these assets entirely with common stock : Commonwealth Construction (CC) needs $3 million of assets to get started, and it expects to have a basic earning power ratio of 35%. CC will own no securities, so all of its income will be operating income. what is the difference between CC's expecte..

User Account

All Pages