10. Keisha own 100% of DEF Company and has a basis of $10,000 in its stocks. DEF has earnings and profits of $9,000 and distributes a cash dividend to Kiesha of $12,000. Keisha has a:

a. catipal gain of $2,000.

b. dividend of $2,000.

c. nontaxable distribution of $1,000.

d. nontaxable distribution of $3,000.

1. A firm's financial statements contain trends that give users insight into the firm's:

a. future market shares.

b. position within its industry.

c. profitability, productivity, and liquidity.

d. current market price for common and preferred stock.