Answer:
C. Buddy cannot be a creditor of the corporation after the redemption.
Explanation:
"A stock redemption that terminates a shareholder’s entire stock ownership in a corporation will qualify for sale or exchange treatment under § 302(b)(3). The attribution rules generally apply in determining whether the shareholder’s stock ownership has been completely terminated. However, the family attribution rules do not apply to a complete termination redemption if the following conditions are met:
The former shareholder has no interest, other than that of a creditor, in the corporation for at least 10 years after the redemption (including an interest as an officer, director, or employee).
The former shareholder files an agreement to notify the IRS of any prohibited interest acquired within the 10-year period and to retain all necessary records pertaining to the redemption during this time period."
Reference: South-Western, Thomson. “Chapter 5.” To Qualify for Sale or Exchange Treatment, a Stock Redemption Generally Must Result in a Substantial Reduction in a Shareholde, 2005,
Answer:
1.78%
Explanation:
The computation of the annual interest rate earn is shown below:
= Every year payment ÷ Present value × 100
= $800 ÷ $45,000 × 100
= 1.78%
We simply divide the every year payment by the present value so that the correct annual interest rate can come
So, we consider all the information which is given in the question
Answer:
there is no deadweight loss.
Explanation:
In a perfect competition, there are many buyers and sellers of homogeneous products, and there is free entry and exit in the market.
This simply means that, in a perfectly competitive market, there are many buyers and sellers (price takers) of homogeneous products (standardized products with substitute) and the market is free (practically open) to all individuals or business entities that are willing to trade all their goods and services.
Generally, a perfectly competitive market is characterized by the following features;
1. Perfect information.
2. No barriers, it is typically free.
3. Equilibrium price and quantity.
4. Many buyers and sellers.
5. Homogeneous products.
Examples of a perfectly competitive market are the Agricultural sector, e-commerce and the foreign exchange market.
Hence, if equilibrium is achieved in a competitive market then, there is no deadweight loss i.e a loss of economic efficiency due to a lack of balance in competing economical influences for goods or services.
The answer to the question is a form of out of court dispute resolution called negotiation.
In legal context, negotiation occurs when one party contact the other party to try and work out a resolution or settlement that both parties can agree with. This option is the correct one because it does not involve a third party, which in other types of dispute resolution such as mediation and arbitration, must be present.
