Walkers is planning to acquire Cayman Bank, a freestanding C corporation, in expectation that new management can be brought in to achieve substantial operating efficiencies. You have been retained to advise Walkers on how to structure the acquisition. Two grad school friends, Joe and Jim, own Cayman Bank. Together, Joe and Jim have a $6 million basis in their Cayman Bank stock. Both Joe and Jim have held their Cayman Bank stock long enough to get long-term capital gain treatment but must sell their stock for nontax reasons. Cayman Bank's tax-basis balance sheet contains $3.5 million of assets, no liabilities, and $2.5 million of net operating loss carryovers. All parties agree that Cayman Bank would be worth $8 million to Walkers with no step-up in Cayman's inside (asset) basis, but would be worth $8.75 million if its inside (asset) basis was stepped up to fair market value. Joe and Jim each face a 40% tax rate on ordinary income and a 20% tax rate on capital gains. The corporate tax rate is 21 %. Option 1: Walkers buys outright all of Cayman Bank's assets for $7 million in a taxable asset acquisition. Cayman Bank pays resulting taxes on the sale, if any, and distributes the proceeds to Joe and Jim in a complete liquidation. Option 2: Walkers pays Joe and Jim $ __ million in cash for their stock in Cayman and does not make a Section 338 election.

2. the external environment (connect)choose whether each example belongs in the general, task, or internal environment.exampleenvironmenta worldwide recession task environment / general environment / internal environmentlocal mothers asking their community grocery store to carry no-salt cheerios-type cereal for their babies task environment / general environment / internal environmentchoose the phrase that best completes the following sentence.the relationship between the task environment and the general environment is best described as: a one-way system: changes in the task environment affect the general environment, but changes in the general environment do not affect the task environment.an open system: changes in the task environment affect the general environment, and changes in the general environment affect the task environment.a one-way system: changes in the general environment affect the task environment, but changes in the task environment do not affect the general environment.a closed system: changes in the general environment do not affect the task environment, and changes in the task environment do not affect the general environment.©bloomberg via getty imagesmanagement in the newsin april 2010, the explosion of british petroleum’s (bp) deepwater horizon oil drilling rig and the accompanying oil spill dramatically changed the external environment in which all oil companies operate. the explosion released more oil than any other accidental spill in history and had a huge impact on the waters and surrounding communities of the gulf coast. the conditions that led to the spill, the attempts to stop the spill, and the clean-up and aftermath of the spill prompted debates in the u.s. senate, concern on wall street, and attention from companies all over the world.match each oil spill event with a specific dimension of the general environment.eventgeneral environment dimensionbp stock prices falling 25% during the first month after the oil spill oil seeping into pelican nesting grounds, which will place the brown pelican back on the endangered species list people moving from louisiana to oklahoma to avoid the effects of the spill