Sun and Moon Corporations Each Have Only One Class of Stock

question 3

Multiple Choice

Sun and Moon Corporations each have only one class of stock outstanding. Their stock ownership is shown below. Which of the four stock ownership changes that are illustrated is the minimum change that is needed if Sun and Moon Corporations are to be brother-sister corporations under the 50% requirements? (Assume the two corporations are equally valued.)

• A) No stock ownership change is required.
• B) Arthur sells 4/5ths of his shares in Sun to David.
• C) Arthur sells his 2/3rds of his shares to David.
• D) Arthur must acquire an additional 30% of Moon Corporation.

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Definitions:

Bizarre Behavior

Actions or conduct that markedly deviates from societal norms, often causing confusion or alarm in others.

Maladaptive Behavior

Actions or tendencies that are counterproductive to oneself or others, often reducing the ability to adequately face and deal with situations.

Personal Distress

A negative emotional response to witnessing the suffering of others, leading to a desire to alleviate that suffering.

Etiology

The study and analysis of the causes or origins of diseases or conditions.