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QUESTION
Rush Company, Inc. has 1000 shares of stock outstanding. Its paid-in-capital is $700,000 and its EP is $600,000.
Rush Company, Inc. has 1000 shares of stock outstanding. Its paid-in-capital is $700,000 and its E&P is $600,000. It distributed $80,000 to Augusta in return for her 100 shares in a redemption that qualified as a complete termination of Augusta’s interest. What is the effect on Rush Company’s capital structure? a.
