A Parent Might Attempt to Resolve a Transfer of Ownership

question 58

Multiple Choice

A parent might attempt to resolve a transfer of ownership by giving active children in the firm's management _____ stock and giving nonactive children _____ stock.

• A)preferred,common
• B)growth,speculative
• C)common,preferred
• D)more,less

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Definitions:

Tax Exemptions

Financial exclusions that reduce taxable income, provided by law for certain income, people, or activities, leading to reduced tax liabilities.

Top-Heavy Pension Plan

Describes a retirement plan in which a disproportionate amount of benefits are allocated to the company's higher-earning employees.

Pension Benefits

Retirement plan contributions made by employers for their employees, providing income upon retirement.

Key Employees

Key Employees are individuals who have a significant impact on the business's operations, usually possessing critical skills, knowledge, or abilities that are hard to replace.