What is the fundamental difference in a general stock redemption vs. a Liquidating Distribution? What are the income tax consequences?

Q: Profits that have been subjected to IAET will be liable to dividend tax when they are eventually…

A: Tax is the charge which is charged on the taxable income earned by the corporation or business…

Q: Explain the legal restrictions imposed upon dividends and other distributions.

A: Dividend is the part of retained earnings that is distributed among equity shareholders and…

Q: own stock that they have previously issued?’

A: company wants to repurchase some of its own stock that they have previously issued because of…

Q: What are the advantages of using restricted stock to compensateemployees?

A: Restricted stock are the shares of a company, which is issued to its employees, but not entirely…

Q: What is the primary motivation for a forward stock split?

A: Here is the Answer

Q: How company  take tax advantage of Bonds Payable

A: A bond is a financial instrument which is issued by an entity with the intention to re-pay the…

Q: Which of the following regarding the weighted-average cost of capital is true?  Group of answer…

A: The weighted average cost of capital is the average rate that a company is expected to pay to its…

Q: Which of the following is NOT a component of Accumulated Other Comprehensive Income? A. Gains or…

A: Other comprehensive income (OCI) includes any unrealized gains or losses from sources of funds from…

Q: Why are preferred dividends deducted from net income when calculating EPS? Are there circumstances…

A: Earnings per cash (EPS):   The amount available as earnings for each of the common shares…

Q: What is different between residual dividend, dividend policy and share repurchase ?

A: To arrange the funds for the business operations, firms issue various securities and pay return on…

Q: Would would an investor prefer to receive a distribution as a dividend?     Answers: Lower tax…

A: Dividend is a proportion of profit which is paid to shareholders when company has ample of funds.…

Q: What is the difference between stock split and stock dividends.

A:

Q: How a company takes tax advantage of Bonds Payable (or any other fixed cost financing)?

A: Giving securities is one path for organizations to fund-raise. A bond capacities as a credit between…

Q: Profits that have been subjected to IAET will be liable to dividend tax when they are eventually…

A: Tax is the charge which is charged on the taxable income earned by the corporation or business…

Q: In this section we examine three theories of ivestor preference: The dividend irrelevance theory.…

A: Note : Since you have asked multiple questions, we will solve the first question for you. If you…

Q: what is the primary purpose of a stock split?

A: The main purpose of a stock split is to increase the liquidity of the stock. hence the number of…

Q: Define dividend tax penalty

A: Dividend tax is a tax paid by a company to government on behalf of the shareholders on the dividend…

Q: Which of the following is not a defining feature of common stock? a residual claim on assets voting…

A: Common stock: The common stock is considered as a security that signifies proprietorship in a…

Q: How are taxes paid on stocks owned ?

A: Tax on stock owned occurs on two situations: 1) Dividend: when dividend is paid by company,  Tax is…

Q: When an acquirer chooses between cash offer or stock offer, which of the followings is the least…

A: Acquisition refers to obtaining the other company wholly or partially by paying the cash…

Q: What is the difference between a stock split and a stock split effected in the form of a stock…

A: Stock split: It is the way of reducing the value of a share by split one share into multiple shares.…

Q: Which of the following is NOT one of the common features between preferred stock and common stock? O…

A: The question is related to Common Stock and preferred stock. In  ase of preferred Stock the paymemts…

Q: Is share dividend payable a current or a non current liability? Explain your answer.

A: The dividend is payable to shareholders on a number of shares they hold as of the date of…

Q: Explain the difference between the Stable Dividend Policy and the Residual Dividend Policy?

A: A company's dividend distribution policy determines the number of dividends and the frequency with…

Q: Where can authoritative IFRS be found related to dilutive securities, stock-based compensation, and…

A:

Q: How any company is taking tax advantage of bonds payable or any other fixed cost financing?

A: Bond can be considered as an I.O.U between the lender and the borrower that contains details about…

Q: Stock appreciation right would normally be settled through

A: Second option is wrong because stock appreciation right is not settled through issue of share…

Q: How does a corporations debt differ from its equit

A: Following are the differences between corporation debt and its equity: Debt is the fund borrowed…

Q: What are stock splits and stock dividends? Whatare the advantages and disadvantages of each?

A: Introduction: Usually, dividend is nothing but, sharing a portion of profits of the corporation, as…

Q: Preferred stock generally has a lower after-tax cost than debt to the corporation. True or False…

A: Solution:- We know, preferred stock is hybrid form of common stock and debt. They get periodic…

Q: Why are unrealized gains and losses on trading securities reported in the incomestatement?

A: Unrealized gains and losses: Trading securities are reported at their fair values. Unrealized gains…

Q: What is the difference between book value per share of common stock and market value per share? Why…

A: Book Value per share: Book value per share can be calculated as follows: BVPS =   Total Equity −…

Q: What is restricted stock? How do restricted stock awards differ from restricted stock units (RSUs)?…

A: Restricted Stock: Restricted stock is the portion of shares held up by the management, to be issued…

Q: Distinguish the differences between stock splits and stock dividends.

A: Dividends are the profits of the company which is distributed among the shareholders of the company.…

Q: What is the difference between a stock dividend and a stock split?

A: Stock: It can be defined as the unit that reflects the equity stake or ownership interest in a…

Q: What is stock split? How is it equivalent to paying a dividend?

A: The stock split is events that increase the outstanding shares and reduce the stated par value. For…

Q: Would would an investor prefer to receive a distribution as a repurchase (capital gain)?…

A: A company, at a point of time, may have excess cash with it for the distribution purpose. It may use…

Q: What did Modigliani and Miller assume about taxes and brokeragecosts when they developed their…

A: Modigliani – Miller theory is a major proponent of 'Dividend Irrelevance' notion that suggested that…

Q: Which of the following is not a method that may be used to account for treasury shares? a. Cost…

A: The treasury shares are the shares which are reacquired by the issuing company from the…

Q: What is stock split? Distinguish between a bonus issue and a stock split.

A: Stock Split Means: it refers to that a company divides its existing share into multiple shares or a…