Xian Corporation and Win Corporation Would Like to Combine into One

question 39

Multiple Choice

Xian Corporation and Win Corporation would like to combine into one entity. Win redeems 90% of its common stock and all of its nonvoting preferred stock, in exchange for 40% of Xian's common and 20% of its nonvoting preferred stock. Win then distributes the Xian stock to its shareholders. Win then becomes a subsidiary of Xian.

• A) This is a taxable transaction.
• B) This restructuring qualifies as a divisive "Type D" reorganization.
• C) This restructuring qualifies as a "Type B" reorganization.
• D) This restructuring qualifies as a "Type E" reorganization.
• E) This restructuring qualifies as an acquisitive "Type D" reorganization.