Which of the Following Statements Is True Regarding "Type A

question 68

Multiple Choice

Which of the following statements is true regarding "Type A" reorganizations?

• A)At least 80% of the acquiring corporation's consideration must be voting stock but the other 20% can be cash or preferred stock.
• B)The target shareholders must receive a proprietary interest in the acquiring corporation. This means that target shareholders must receive at least 40% of acquiring's stock.
• C)Substantially all of the target's assets must be transferred to the acquiring corporation. This means at least 90% of the net asset value.
• D)Assumption of all liabilities for a "Type A" reorganization includes unknown and contingent liabilities.
• E)None of the above statements is true.

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Definitions:

Special Endorsement

A signature or statement on a financial instrument, such as a check, specifying the conditions under which the instrument can be transferred or paid out.

Blank Endorsement

An endorsement on a financial instrument, such as a check, with only the signature of the endorser, making it payable to anyone holding the instrument.

Payee's Signature

The signature of the person entitled to receive payment on a check or document, signifying approval or receipt of money.

Communicating Income

The process of sharing or reporting financial earnings, typically involving individuals, businesses, or other organizations.