All of Sphere Corporation's Single Class of Stock Is Owned

question 96

Multiple Choice

All of Sphere Corporation's single class of stock is owned by four unrelated individuals in the following manner: Zack 27%, Xu 24.33%, Yvonne 24.33%, and Win 24.33%. Some of Zack's stock holdings are redeemed by Sphere Corporation, resulting in Zack's interest being reduced to 22.27%. Xu, Yvonne, and Win owned equally the remaining 77.73% of the Sphere stock. How should the redemption of Zack's stock be treated by Zack?

• A)dividend income
• B)sale transaction
• C)return of capital
• D)some other treatment

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Definitions:

Assumptions

Statements or ideas accepted as true without proof, serving as the basis for further reasoning or argument.

Placebo

A substance used in experiments that has no therapeutic effect.

Therapeutic Effect

The beneficial outcome of a treatment or intervention on the health or well-being of an individual or population.

Prove Claims

The process of demonstrating the truth or validity of statements or assertions through evidence or argument.