West Corporation Purchases 50 Shares (Less Than 1%)of Perch Corporation

question 85

Multiple Choice

West Corporation purchases 50 shares (less than 1%) of Perch Corporation common stock on April 3. The ex-dividend date is April 4. West Corporation pays $50,000 for the stock and receives a dividend of $5,000 on the Perch stock. On May 1, West Corporation sells the Perch stock for $45,000. West's taxable income before the dividends-received deduction is $4,000. West's dividends-received deduction is

• A)$3,500.
• B)$3,200.
• C)$2,800.
• D)$0.

---

Definitions:

Forward Reaction

A chemical reaction that proceeds in the direction of forming products from reactants, as initially written in a chemical equation.

Dynamic Equilibrium

A situation in which two opposing processes occur at the same rate, leading to no net change in the system.

Products

Substances that are formed as a result of a chemical reaction, appearing on the right side of a chemical equation.