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Chao, Louis, and Mari, unrelated individuals, own all of the shares of Cerise Corporation. All three shareholders have been active in the management of Cerise
Chao, Louis, and Mari, unrelated individuals, own all of the shares of Cerise Corporation. All three shareholders have been active in the management of Cerise since its inception. In the current year, Chao wants to retire and sell all of her shares in the corporation. Select either "Yes" or "No" to indicate whether the following issues should be considered in determining whether Chao should sell her stock to one of the other shareholders, to Cerise Corporation, or to a third party. a. Whether Louis or Mari have a preference for personally acquiring the Cerise stock or for a stock redemption or for a sale to a third party. b. Whether Louis or Mari have the financial resources to acquire the Cerise stock. c. Whether Cerise Corporation has the financial resources to fund a stock redemption. d. If property can be distributed in the redemption, whether Cerise has property suitable for a distribution and the tax consequences from such a distribution. e. The effect of any property sale and redemption distribution on Cerise's E \& P. f. Whether there is a market for a sale of the stock to a third party. g. The tax treatment of any expenditures incurred in a redemption of Chao's shares, including interest expense related to a debt-financed redemption
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