Mr. Jones Smith want's to buy Smithon Manufacturing because it is very profitable. Right now it has
Question:
1. Outright purchase of Smithon stock
A. Should Mr. Jones purchases the stock of Smith outright, leaving Smithon intact? What about issuing debt in his Johnson Services company to pay for the Smith Company would that raise debt to equity issues?
B. Should Mr. Jones converts Smithon to an S corporation and changes the fiscal year end to a calendar year end?
C. What potential income tax ramifications exist for Mr. Jones personally if he purchases the stock of Smithon and converts it to an S corporation?
D. Should Mr. Jones merges Johnson Services with Smithon? What type of merger or acquisition would be best (i.e., A type, etc.)?
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Related Book For
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
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