<span>Answer to part a of this question is "The stock dividend is not taxable because it is pro rata to all the shareholders."
</span>Answer to 2nd question is "The new stock is allocated part of the tax basis of the old stock based on relative fair market value.
After the stock dividend, Madison will own 1,100 shares of Badger stock (1,000 + 1,000/10), each with the same fair market value.
Her basis in each <span>share of stock will be $91, computed as (1,000 shares x $100 basis) / 1,100."</span>
Let the additional number of units, babymart need to sell be x, then
Revenue = $315(400 + x)
New fixed cost = $50,000 - $5,000 = $45,000
Thus, Total cost = $115(400 + x) + $45,000
Net income = Revenue - Total cost = 315(400 + x) - 115(400 + x) - 45,000 = 40,000
⇒ 200(400 + x) = 40,000 + 45,000
⇒ 80,000 + 200x = 85,000
⇒ 200x = 85,000 - 80,000 = 5,000
⇒ x = 5,000 / 200 = 25
Therefore, the additional number of units babymart needs to sell to maintain the same level of income is 25 units.
<span>This allows for the intellectual property of those books that do have a copyright to be protected. This gives the owners and publishers of those books the ability to still turn a profit on their copies, which might be negated if books with a copyright were made more freely available.</span>
CDE are the answers to this question.
