Sun and Moon Corporations Each Have Only One Class of Stock

question 59

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:

Early Retirement

The decision to leave one's job and cease working before the traditional retirement age, often to pursue personal interests or due to financial security.

Physical Health

A state of well-being in which an individual is able to perform daily activities without limitation or pain, encompassing all aspects of physical body function and maintenance.

Ingroup

A social group to which a person psychologically identifies as being a member; contrasts with "outgroup," which is any group the person does not identify with.

Social Identity Group

A collective of individuals who perceive themselves as belonging to the same social category or sharing significant aspects of their identity.