Parent Corporation Owns 70% of Sam Corporation's Single Class of Stock

question 21

Multiple Choice

Parent Corporation owns 70% of Sam Corporation's single class of stock. This year, Parent Corporation purchases for cash the remaining 30% of Sam Corporation's stock from four individual investors pursuant to a tender offer. A plan of liquidation is approved by Sam Corporation's shareholders during the last month of this year, and Sam Corporation's assets are distributed by year-end to Parent Corporation in exchange for all of Sam's outstanding stock. Parent Corporation should

• A)not recognize any gains and losses on the redemption.
• B)recognize gains and losses on the redemption.
• C)recognize gains but not losses on the redemption.
• D)recognize losses but not gains on the redemption.

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Definitions:

Leadership Style

The manner and approach of providing direction, implementing plans, and motivating people that a leader utilizes in an organization or team.

Leader Behavioral Style

The manner in which a leader typically behaves or interacts with others, often influencing their leadership effectiveness.

Decisions

Choices made from two or more alternatives.

Delegating

The act of assigning responsibility and authority to others to carry out specific activities while maintaining accountability for the outcome.