atives (after-tax)? Details ($ in millions): Corporate income tax rate: 30%  Capital gains rate: 20% Stock Sale: Purchase price: $4,000 Stock basis: $1,500 Asset Sale: Purchase price: $4,000 Asset basis: $1,500

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Given the following details, what is the difference in seller net proceeds between the asset sale and the stock sale alternatives (after-tax)?

Details ($ in millions):

  • Corporate income tax rate: 30% 
  • Capital gains rate: 20%
  • Stock Sale:
    • Purchase price: $4,000
    • Stock basis: $1,500
  • Asset Sale:
    • Purchase price: $4,000
    • Asset basis: $1,500

 

A.          $1,750

B.           $600

C.           $1,400

D.          $2,000

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