Which of the Following Requirements Must Be Met for a Redemption

question 14

Multiple Choice

Which of the following requirements must be met for a redemption to be treated as substantially disproportionate?

• A) The shareholder must own less than 50% of the outstanding stock (in terms of voting power) after the redemption.
• B) After the redemption, the shareholder must own less than 80% of his percentage ownership of common stock (voting and nonvoting) prior to the redemption.
• C) After the redemption, the shareholder must own less than 80% of his percentage ownership of voting stock prior to the redemption.
• D) All of the above must be met.

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Definitions:

Coronary-Prone Behavior

Refers to personality traits and behaviors, including time urgency and hostility, linked to an increased risk of heart disease.

Type A Behavior

Behavior characterized by a sense of time urgency, competitiveness, and hostility.

Passive Behavior

A pattern of avoiding confrontation and not expressing needs or desires directly.

Emotional Support

The provision of reassurance, acceptance, and encouragement during times of stress.