Ilima Kahale Is the Sole Shareholder of Kahale Foods Co

question 11

Multiple Choice

Ilima Kahale is the sole shareholder of Kahale Foods Co.Ilima owns one class of common shares which have a value of $200,000.Ilima is approaching retirement age and would like two key employees to take over Kahale Foods.At this point in time, the employees do not have enough excess cash to buy Ilima's shares.Which of the following statements is true with regard to a corporate reorganization that would allow the employees to take over the ownership of the company?

• A)A reorganization of share capital would allow Ilima to convert common shares to fixed value preferred shares, while also issuing nominal value common shares to the employees, resulting in an immediate tax consequence for Ilima.
• B)A reorganization of share capital would allow Ilima to convert common shares to fixed value preferred shares, while also issuing nominal value common shares to the employees, resulting in an immediate tax consequence for the employees.
• C)A reorganization of share capital would allow Ilima to convert common shares to fixed value preferred shares, while also issuing nominal value common shares to the employees, resulting in an immediate tax consequence for the corporation.
• D)A reorganization of share capital would allow Ilima to convert common shares to fixed value preferred shares, while also issuing nominal value common shares to the employees, resulting in no immediate tax consequences.

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Definitions:

Stem

In the context of data visualization, the stem represents the main part of a stem-and-leaf plot, displaying digits for significant value while the leaf displays less significant digits.

Split the Stems

A technique used in stem-and-leaf plots to spread out the data more evenly across the plot by splitting the stems to create more intervals.

Stemplot

A graphical method used in statistics to display the distribution of a dataset, where each number is split into a stem and a leaf, thus showing the shape of the data.

Split the Stem

A method in stem-and-leaf plots to increase the plotting resolution by splitting stems into two halves, improving data visualization.