Sun and Moon Corporations Each Have Only One Class of Stock

question 1

Multiple Choice

Sun and Moon Corporations each have only one class of stock outstanding.Their stock ownership is shown below. $$\begin{array} { | c | c | c | } \hline \text { Shareholder } & \text { Sun Corporation } & \text { Moon Corporation } \\\hline \text { Arthur } & 50 \% & 60 \% \\\text { Brenda } & 20 \% & 40 \% \\\text { Charles } & 30 \% & 0 \% \\\text { David } & 0 \% & 0 \% \\\hline\end{array}$$ 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%-80% requirements? (Assume the two corporations are equally valued.)

• A)No stock ownership change is required.
• B)Charles must acquire an additional 10% of Moon Corporation.
• C)Charles must acquire an additional 5% of Sun Corporation.
• D)Arthur must acquire an additional 30% of Moon Corporation.

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