The Rho Corporation was incorporated eight years ago by Tyee and Danette. Tyee received 11,600 shares of common stock for his $232,000 contribution, and Danette received 23,200 shares of common stock for her $464,000 contribution. Five years ago, both Tyee and Danette acquired $116,000 of Rho bonds paying 3% interest. In the current year, Rho's common stock is valued at $2,088,000. SheenCo would like to acquire a 25% interest in Rho by purchasing common stock from Rho.

c. If the exchange of common stock for preferred stock occurs before the acquisition by SheenCo, Tyee and Danette each will receive fill in the blank 3 shares of preferred stock valued at $fill in the blank 4 in exchange for fill in the blank 5 shares of common stock.

d. Is the purchase of common stock by SheenCo a taxable event?

YesNoNo

How many shares of common stock will SheenCo purchase in order to have a 25% interest in Rho? fill in the blank 7 shares