The Stock of Loon Corporation Is Held as Follows: 85

question 26

Multiple Choice

The stock of Loon Corporation is held as follows: 85% by Duck Corporation and 15% by Gerald, an individual. Loon Corporation is liquidated in December of the current year, pursuant to a plan adopted earlier in the year. Loon Corporation distributes land with a basis of $350,000 and fair market value of $390,000 to Gerald in liquidation of his stock interest. Gerald had a basis of $200,000 in his Loon stock. How much gain will Loon Corporation recognize in this liquidating distribution?

• A) $0
• B) $40,000
• C) $190,000
• D) $390,000
• E) None of the above

Determine the rate of yield on preferred stock shares.

Calculate the dividend per share for preferred stock based on the declared total dividend and par value.

Assess the impact of market price versus par value on investment decisions.

Understand the composition of a corporation’s capital structure.

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Definitions:

Hyoid Bone

A U-shaped bone in the neck that supports the tongue and provides attachment for muscles of the neck and lower jaw.

Larynx

The voice box located in the neck, responsible for sound production and protecting the trachea against food aspiration.

Cribriform Plate

A portion of the ethmoid bone in the skull that contains small holes to allow for the passage of the olfactory nerves from the nasal cavity to the olfactory bulbs.

Olfaction

The sense of smell, a chemical sense that detects odors or scents through sensory organs in the nose.