Which of the Following Statements Best Describes a Bootstrap Acquisition

question 11

Multiple Choice

Which of the following statements best describes a bootstrap acquisition?

• A)The shareholder sells part of his or her stock to a purchaser and then the corporation redeems the original shareholder's remaining stock.
• B)The shareholder sells his stock in exchange for cash and debt.
• C)The shareholder exchanges his stock for stock of a different corporation.
• D)none of the above

Understand the concepts of capital gains and non-eligible dividends and their impact on tax calculations.

Analyze and calculate the firm's cash flow to stockholders.

Determine the firm's cash flow from assets.

Comprehend the application of provincial tax rates to income calculations.