As a Result of a Redemption, a Shareholder's Interest (Direct

question 112

True/False

As a result of a redemption, a shareholder's interest (direct and indirect) in the corporation decreased from 80% to
55%. The redemption qualifies for sale or exchange treatment as a disproportionate redemption.

---

Definitions:

Share Value

The financial worth of a single share of a company's stock.

Dividend Policy

Dividend Policy is a company's strategy or guidelines used to decide how much of its earnings will be paid out to shareholders in the form of dividends.

Common Stock

This is a type of security that signifies ownership in a corporation and represents a claim on part of the company's profits.

Dividends Payable

The amount of declared dividends that a company owes to its shareholders but has not yet paid.