Sun and Moon Corporations Each Have Only One Class of Stock

question 26

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:

Behavioral Self-Monitoring

In behavior therapy, a method of keeping careful data on the frequency and consequences of the behavior to be changed.

Graduated Exposure

A therapeutic technique used to treat phobias and anxiety by gradually exposing the patient to the feared object or context without any danger.

Counterconditioning

A therapy technique used to replace negative responses to a stimulus with positive ones.

Systematic Desensitization

A therapeutic method used to reduce phobia or anxiety through gradual exposure to the feared object or situation paired with relaxation techniques.