Andy Owns 20% of North Corporation and 60% of Tent

question 35

Multiple Choice

Andy owns 20% of North Corporation and 60% of Tent Corporation. North and Tent have only one class of stock outstanding. Barbara owns 50% of North Corporation and 20% of Tent Corporation. North and Tent Corporations will be brother-sister corporations if

• A)no stock ownership change occurs.
• B)Barbara acquires an additional 10% of North stock.
• C)Andy acquires an additional 10% of North stock and Barbara acquires an additional 10% of Tent stock.
• D)Barbara acquires an additional 10% of North stock and an additional 10% of Tent stock.

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Definitions:

Common Stockholders

Individuals or entities that own shares of a company's common stock, giving them rights to vote on company matters and receive dividends, subject to the company's performance and dividend policy.

Voting Rights

Rights granted to shareholders to vote on matters of corporate policy, including decisions on the composition of the board of directors.

Total Stockholders' Equity

The total net value of a company as determined by subtracting its total liabilities from its total assets, representing ownership interest.

Stockholder

An individual or entity that owns shares in a corporation's stock, giving them a claim on parts of the corporation’s assets and earnings.