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aleksklad [387]
3 years ago
12

Clampett, Inc. has been an S corporation since its inception. On July 15, 2019, Clampett, Inc. distributed $40,500 to J. D. His

basis in his Clampett, Inc. stock on January 1, 2019, was $35,000. For 2019, J. D. was allocated $12,000 of ordinary income from Clampett, Inc. and no separately stated items. How much capital gain does J. D. recognize related to Clampett, Inc. in 2019?a. $40,500.b. $12,000.c. None of the choices are correct.d. $52,500.e. $24,000.
Business
1 answer:
AlexFokin [52]3 years ago
4 0

Answer:

c. None of the choices are correct

Explanation:

Calculation of capital gain  

Basis of stock                                       $35,000

Allocated ordinary income               $12,000

Total basis                                       $47,000

Amount distributed                       $40,500

Therefore, Since basis is more than distribution capital gain, The capital gain is $0.

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You own a portfolio equally invested in a Rf asset and two stocks. If one of the stocks has a beta of 1.85 and the total portfol
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Answer:

1.15

Explanation:

If investment is made in equal proportions, it means that;

weight in risk free ; wRF = 33.33% or 0.3333

Let the stocks be A and B

weight in stock A ; wA = 33.33% or 0.3333

weight in stock B; wB = 33.33% or 0.3333

Beta of A; bA = 1.85

Let the beta of the other stock be represented by "bB"  

Beta of risk free; bRF = 0

Beta of portfolio = 1 since it is mentioned that "the total portfolio is equally as risky as the market "

The weight of portfolio is equal to the sum of the weighted average beta of the three assets. The formula is as follows;

wP = wAbA + wBbB + wRF bRF

1 = (0.3333 * 1.85) + (0.3333*bB) + (0.3333 *0)

1 = 0.6166 +0.3333bB + 0

1 - 0.6166 = 0.3333bB

0.3834 = 0.3333bB

Next, divide both sides by 0.3333 to solve for bB;

bB = 0.3834/0.3333

w=bB = 1.15

Therefore, the beta for the other stock would be 1.15

5 0
3 years ago
Defining the organizational mission forces managers to identify ________.
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3 years ago
At a local Bed and Bath Superstore, the manager, Jill Roe, knows her customers will pay no more than $230 for a bedspread. Jill
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Answer:

$164.29

Explanation:

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where,

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So, the purchase price is

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2 years ago
Which life insurance settlement option guarantees payments for the lifetime of the recipient, but also specifies a guaranteed pe
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Answer:

Life income with certain period annuity

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Should all small businesses have websites and utilize social media​
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Yes

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