Racket corporation and laocoon corporation create raccoon corporation. racket transfers $600,000 in assets for all of raccoon's common stock. racket distributes its remaining assets ($300,000) and the raccoon common stock to its shareholder, mia, for all her stock in racket (basis $950,000) and then liquidates. laocoon receives all the raccoon preferred stock for its $400,000 of assets. laocoon distributes its remaining assets ($300,000) and the raccoon preferred stock to its shareholder, carlos, for all his stock in laocoon (basis $200,000) and then liquidates. how will this transaction be treated for tax purposes?

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Christopher kim, cfa, is a banker with batts brothers, an investment banking firm. kim follows the energy industry and has frequent contact with industry executives. kim is contacted by the ceo of a large oil and gas corporation who wants batts brothers to underwrite a secondary offering of the company's stock. the ceo offers kim the opportunity to fly on his private jet to his ranch in texas for an exotic game hunting expedition if kim's firm can complete the underwriting within 90 days. according to cfa institute standards of conduct, kim: a) may accept the offer as long as he discloses the offer to batts brothers. b) may not accept the offer because it is considered lavish entertainment. c) must obtain written consent from batts brothers before accepting the offer.

Aggart technologies is considering issuing new common stock and using the proceeds to reduce its outstanding debt. the stock issue would have no effect on total assets, the interest rate taggart pays, ebit, or the tax rate. which of the following is likely to occur if the company goes ahead with the stock issue? a. the roa will decline. b. taxable income will decline. c. the tax bill will increase. d. net income will decrease. e. the times-interest-earned ratio will decrease