x has ample E&P, x regularly pays annual cash dividends on all stock and x pays interest on any outstanding debt each year. In problems involving two classes of stock outstanding, the two classes are not held in the same proportions by the shareholders. Determine for each problem the tax results to all affected shareholders and to x.x has ample E&P, x regularly pays annual cash dividends on all stock and x pays interest on any outstanding debt each year. In problems involving two classes of stock outstanding, the two classes are not held in the same proportions by the shareholders. Determine for each problem the tax results to all affected shareholders and to x.

X issues to C, for $100 per share, X preferred stock that the owner can out back to X for $150 per share in 5 years

1. In addition: X can, but is not required to, call the stock for redemption at $150 at any time.
2. Alternative: The shareholder has no put although X can, but is not required to, call the stock at $150 after five years.