Cheers Corporation purchased for $500,000 5,000 shares of Beer Corporation common stock (less than 5% of the

Question:

Cheers purchased for $500,000 5,000 shares of Beer (less than 5% of the outstanding Beer stock) at the beginning of the current year. It used $400,000 of borrowed money and $100,000 of its own cash to make this purchase. Cheers paid $50,000 of interest on the debt this year. Cheers received a $40,000 cash on the Beer stock on September 1 of the current year.
a. What amount can Cheers deduct for the interest paid on the loan?
b. What dividends-received deduction can Cheers claim with respect to the Common Stock
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