Identify Which of the Following Statements Is True

question 70

Multiple Choice

Identify which of the following statements is true.

• A) Aspect Corporation transfers assets to newly created Expert Corporation in exchange for all of Expert's stock. Shortly after the transfer, Aspect exchanges one- half of the Expert stock that it receives for land. The individuals transferring the land have never been Aspect shareholders. This transaction qualifies as a divisive Type D reorganization and is tax- free to all parties.
• B) The control requirement for Sec. 355 differs from the control requirement under Sec. 351.
• C) Common stock can be exchanged for preferred stock in the same corporation as a Type E reorganization.
• D) All of the above are false.

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Definitions:

Allocation Of Resources

The process of distributing available resources among various competing needs or projects in an economy.

Five Fundamental Questions

The five fundamental questions refer to key economic questions any economy faces about what goods to produce, how to produce them, for whom to produce, how to accommodate change, and how to promote innovation.

Scarce Supply

A situation where the availability of a product or service is limited relative to the desire or demand for it.

Market System

A market economy characterized by investment, production, and distribution decisions that are influenced by the forces of supply and demand, with the prices of goods and services being established in a system where they are allowed to fluctuate freely.