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Milan Corporation is owned by four shareholders. Andy and Bob each own 40% of the outstanding common and preferred stock. Chris and Doug each own

Milan Corporation is owned by four shareholders. Andy and Bob each own 40% of the outstanding common and preferred stock. Chris and Doug each own 10% of the outstanding common and preferred stock. The shareholders want to retire the preferred stock that was issued five years ago when the corporation was in the midst of a major expansion. Retirement of the preferred stock will eliminate the need to pay annual preferred dividends. Explain the tax consequences of Alternative 1 to the shareholders

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