Identify Which of the Following Statements Is True

question 80

Multiple Choice

Identify which of the following statements is true.

• A)Able Corporation (New York)transfers its assets to Able Corporation (Delaware)in exchange for all of its stock. Able Corporation (New York)is liquidated. This exchange is a Type F reorganization.
• B)Strict adherence to legislative guidelines with regard to reorganizations is sufficient for tax-free treatment.
• C)A suitable business purpose for a tax-free reorganization is to permit the minimization of shareholder taxes.
• D)All of the above are false.

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Definitions:

Budget Constraint

A budget constraint represents the combinations of goods and services that a consumer can purchase given their income and the prices of those goods and services.

DVDs

Optical disc storage format used to store high capacity data like movies, software, and other digital content.

CDs

Short for Certificates of Deposit, which are savings certificates with a fixed maturity date and specified fixed interest rate that are issued by banks.

Budget Constraint

A budget constraint represents the limitations on the spending choices of consumers based on their income and the prices of goods and services.