Which of the Following Statements Most Accurately Describes an Aspect

question 3

Multiple Choice

Which of the following statements most accurately describes an aspect of a tax-deferred sale of a business to a group of employees, through share reorganization?

• A) The employees will purchase the corporation's original common shares from the vendor.
• B)There is a risk to the original shareholder, as the value of his/her preferred shares following the reorganization depends on the future success of the corporation.
• C) This method of sale is appropriate when the vendor is unsure of the purchaser's ability to manage the business.
• D) The vendor generally does not participate in the financing of the sale of the business.

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