Ryan Company Purchased 80% of Chase Company for $240,000 When

question 115

Multiple Choice

Ryan Company purchased 80% of Chase Company for $240,000 when Chase's book value was $300,000. Chase has 50,000 shares outstanding and currently has a book value of $400,000.Assume Chase reacquired 8,000 shares of its common stock from outsiders at $10 per share.What is Ryan's percent ownership in Chase after the acquisition of the treasury shares (rounded) ?

• A) 80%.
• B) 95%.
• C) 64%.
• D) 76%.
• E) 69%.

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Definitions:

Correlate

To have a mutual relationship or connection, in which one thing affects or depends on another.

Conscientiousness

A personality trait characterized by diligence, carefulness, thoroughness, self-discipline, and the propensity to plan and organize tasks efficiently.

Extraversion

A personality trait characterized by a preference for social interaction, high levels of energy, and the seeking of stimulation in the external world.

Negatively Correlated

A connection between two factors where as one factor rises, the other falls, demonstrating a reverse relationship.