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rewona [7]
3 years ago
12

Rose has a $20,000 basis in the 60% of the Parent Corporation stock that she owns. Parent Corporation owns a 70% interest in Chi

ld Corporation. Parent and Child have current and accumulated E&P balances of $25,000 and $40,000, respectively. In return for $15,000, Rose sells 10% of the Parent Corporation stock to Child Corporation. What is the impact of the transaction on Rose?
Business
1 answer:
Degger [83]3 years ago
7 0

Answer:

The answer is: Rose will be taxed as receiving a $15,000 dividend distribution.

Explanation:

Since Parent Corporation owns 70% of Child Corporation, for tax purposes they are considered as one single firm. Rose is the main stockholder of Parent Co. so for tax purposes she is also a stockholder in Child Co. When Child Co. gives her $15,000 in exchange for Parent Co. stock, this would be considered as a dividend distribution rather a stock sale.

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Assume that a currency's spot and future prices are the same, and the currency's interest rate is higher than the U.S. rate. The
Andrei [34K]

Answer:

put upward pressure on; put downward pressure on

  • The actions of U.S. investors to lock in this higher foreign return would PUT UPWARD PRESSURE ON the currency's spot rate and PUT DOWNWARD PRESSURE ON the currency's futures price.

Explanation:

If both the spot and the forward price of a currency are the same, it means that it should be worth the same today than in the future. If you can earn higher interest by investing in that foreign currency, then investors will start purchasing higher amounts of the foreign in order to invest and gain higher rates.

Since the demand for the foreign currency increases, that put upward pressure its current price. Simply more investors will want to invest in that currency. While that happens right now, the market will tend to adjust to correct this arbitrage, and the way this can be adjusted is by lowering the future price of the currency. That puts downward pressure on the forward rate.

3 0
3 years ago
Madison Davidson negotiated for a $30,000 loan with $200 monthly payments, plus 9 percent interest. In this case, what is the mo
Julli [10]

Answer:

$225

Explanation:

Remember, the interest rates of a loan are spread out equally each month.

Therefore, we calculated the value of the total interest in dollars for a year:

30,000/100 x 9 = $2,700 (annual interest in dollars)

Next, we divide the annual interest in dollars by 12 to get the value from the first month:

$2700/12= $225 (First month interest in dollars)

4 0
3 years ago
In which statement(s) are "demand" and "quantity demanded" used correctly? (I) "An increase in the price of tea will reduce the
ryzh [129]

Answer:

The correct answer is letter "A": in both statements I and II.

Explanation:

(I) According to the demand law, <em>if the price of tea increases the quantity demanded of tea will decrease</em>. If the price of tea decreases, the quantity demanded of tea will increase. Quantity demanded and the price has an inversely proportional relationship in the demand law.

(II) When talking about complementary goods like tea and sugar, <em>if the price of tea increases will result in a negative movement along the demand curve of tea and will cause the demand curve of sugar to move inwards. In such a scenario, the demand for each good will be reduced.</em>

8 0
3 years ago
Variable costs A. are fixed per unit and vary in total as production levels change. B. are fixed in total as production levels c
Bumek [7]

Answer: Option A

Explanation: In simple words, Variable cost is that cost of the business that changes with level of production. Hourly wage rate of workers, electricity bill of factory are some of many examples of variable cost.

The electricity consumption is fixed per unit, but if the level of production rises the electricity bill also rises as more units will be consumed.

Hence, from the above we can conclude that the right option is A.

8 0
3 years ago
A 51-year-old female is referred to your office after her PCP incidentally found a left adrenal mass of 2.8 cm in diameter on an
trapecia [35]

Answer:

In the management of this patient, there is no need for any tests to be done. However there are several steps must be taken which includes measurement of the activity in the plasma renin, measurement of the concentration of the plasma aldosterone, measurement of fractionated catecholamines and metanephrines, and administering the patient with 1-mg overnight dexamethasone suppression test .

Explanation:

3 0
3 years ago
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