Answer:
The corporation's tax basis in the property received in the exchange is $889
Explanation:
Property was transferred by Carlos, and at the time of Transfer Carlos basis on the Property is $820.
From "Carryover basis" rule,
Corporation Tax basis on Property = (Basis of Carlos) + (Gain recognized)
So, Corporation's tax basis in the Property
= $820 + $69
= $889
It can be C because it's accepting the risk to do it
But it can also be B because it's sharing the risk with everyone else
Performing calculations and using equipment
sorry which language I can't help
a. Risk Premium on J & M common stock = Return on Market - Risk Free Rate
Risk Premium on J & M common stock = 11% - 6%
Risk Premium on J & M common stock = 5%
b. Required Return = Rf + Beta * (RM - RF)
= 6% + 1.2*5%
= 6% + 6%
= 12%
So the required rate of return is 12% which should be atleast provided by J & M common stock.
c. J & M cost of common stock equity is the same as b that equals to 12%.
