Identify the two conditions that must be met for a stock dividend to be nontaxable. OA) O B) C) The corporation must issue the stock dividend to holders of all classes of stock. The corporation must issue the stock dividend to only holders of common stock. The corporation must issue the stock dividend in proportion to the percentage of stock owned. O D) The corporation must give the holder the option to receive cash in lieu of stock.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Identify the two conditions that must be met for a stock dividend to be nontaxable.
OA)
O
B)
C)
The corporation must issue the stock dividend to holders of all classes of
stock.
The corporation must issue the stock dividend to only holders of common
stock.
The corporation must issue the stock dividend in proportion to the
percentage of stock owned.
O D) The corporation must give the holder the option to receive cash in lieu of
stock.
Transcribed Image Text:Identify the two conditions that must be met for a stock dividend to be nontaxable. OA) O B) C) The corporation must issue the stock dividend to holders of all classes of stock. The corporation must issue the stock dividend to only holders of common stock. The corporation must issue the stock dividend in proportion to the percentage of stock owned. O D) The corporation must give the holder the option to receive cash in lieu of stock.
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