Given the following details, what are the seller's net proceeds from a stock sale and an...

Given the following details, what are the seller's net proceeds from a stock sale and an asset sale? Please show all work

Details:

Corporate tax rate: 38%

Capital gains rate: 20%

Stock sale:

Purchase price $4,000.0 million

Stock basis: $1,000.0 million

Asset sale:

Purchase price: 4,000.0 million

Asset basis: $1,000.0 million

Expert Solution

Net proceeds from stock sale
Particulars	Amount in $' million)
Purchase price	4,000
Stock basis	(1,000)
Proceeds from stock sale	3,000
Tax (38% of proceeds)	(1,140)
Net proceeds from stock sale	1,860


Net proceeds from asset sale
Net proceeds from asset sale	Amount in $' million)
Purchase price	4,000
Asset basis	(1,000)
Proceeds from asset sale	3,000
Tax (20% of proceeds)	(600)
Net proceeds from asset sale	2,400

ekkarill92 answered 9 months ago

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