Table Corporation transfers one-half of its assets to Chair Corporation in exchange for 100% of Chair Corporation's single class of stock. Following the exchange, Table Corporation distributes the Chair stock ratably to its shareholders. This transaction will constitute a

Question

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This transaction constitutes a divisive Type D reorganization because Table Corporation is transferring assets to Chair Corporation in exchange for stock and then distributing that stock to its shareholders, effectively dividing the corporation's assets among its shareholders.

Table Corporation Transfers One-Half of Its Assets to Chair Corporation