Prosperity Company holds 40% of the voting rights of MNO Co. The remaining shares was held by thousands of shareholders, each hold less than 1% of the voting rights. None of the shareholders has contractual arrangement to consult any of the others or make collective decisions. Which of the following is true regarding the above situation? (Select the best answer) Group of answer choices A.Prosperity does not power over MNO because it holds only protective right. B.Prosperity has power over MNO Co. because Prosperity owns the highest percentage of shares. C.The 40% interest above is presumed to have a de-facto control over MNO Co. because of the relative dispersion of other shares. D.Prosperity does not have power over MNO Co. because its holding is not sufficient rights to give power.
Prosperity Company holds 40% of the voting rights of MNO Co. The remaining shares was held by thousands of shareholders, each hold less than 1% of the voting rights. None of the shareholders has contractual arrangement to consult any of the others or make collective decisions. Which of the following is true regarding the above situation? (Select the best answer) Group of answer choices A.Prosperity does not power over MNO because it holds only protective right. B.Prosperity has power over MNO Co. because Prosperity owns the highest percentage of shares. C.The 40% interest above is presumed to have a de-facto control over MNO Co. because of the relative dispersion of other shares. D.Prosperity does not have power over MNO Co. because its holding is not sufficient rights to give power.
Chapter19: Corporations: Distributions Not In Complete Liquidation
Section: Chapter Questions
Problem 51P
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Question
Prosperity Company holds 40% of the voting rights of MNO Co. The remaining shares was held by thousands of shareholders, each hold less than 1% of the voting rights. None of the shareholders has contractual arrangement to consult any of the others or make collective decisions. Which of the following is true regarding the above situation? (Select the best answer)
Group of answer choices
A.Prosperity does not power over MNO because it holds only protective right.
B.Prosperity has power over MNO Co. because Prosperity owns the highest percentage of shares.
C.The 40% interest above is presumed to have a de-facto control over MNO Co. because of the relative dispersion of other shares.
D.Prosperity does not have power over MNO Co. because its holding is not sufficient rights to give power.
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ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT