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- PT A owns 40% ordinary shares of PT B and is exposed to variable returns from its involvement in PT B. The remaining 60% of PT B’s shares are owned by hundreds of unrelated shareholders and none own more than 5% individually. There are no arrangements for shareholders to consult with one another and experience shows that only a few shareholders exercised their voting rights at all. The relevant activities of PT B are directed by the voting rights granted through the common shares. Required: 1. In the above situation, does PT A control PT B? Please explain and give reasons. 2. Would your answer be the same if the remaining 60% of PT B’s shares are owned by 2 investors each 27% and 3 other investors each 2%? Please explain.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.ieko holds 50 out of 180 shares of Natural Gas, Inc. Natural Gas uses cumulative voting to elect directors. At the annual shareholder meeting, the shareholders must vote for 5 new directors. This means that a. Mieko has a total of 180 votes which has may cast all on one candidate or split them among several nominees. b. Mieko has a total of 250 votes which he may cast all on one candidate or split them among several nominees. c. Meiko has a total of 50 votes which he may cast all on one candidate or split them among several nominees. d. Mieko has a total of 200 votes which he may cast all on one candidate or split them among several nominees.
- Dover Corporation owns 18% of Hassan, Inc.'s voting stock. The remaining Hassan stock is held by a diverse group of investors with small stakes. Monica Kurtz, Dover's president and a member of Hassan's board of directors, has a strong influence on Hassan's policies. Dover's net income rises as it receives dividends from Hassan under the market value method of accounting for investments. Dover pays President Kurtz a bonus based on a percentage of the company's net income. As a result, Kurtz can exert some control over her personal bonus by influencing Hassan's dividends. In 20X0, there is a recession, and corporate income is low. Kurtz wields enough power to have Hassan, Inc. pay a large cash dividend. The action requires Hassan borrowing so much money that he may face financial difficulties. Required: In getting Hassan to pay the large cash dividend, is Kurtz acting within her authority as a member of the Hassan board of directors? Are Kurtz s actions ethical? whom can her actions…P Ltd owns 55% of the shares of S Ltd. Each share entitles the holder to one vote at the AGM.The decisions made at the AGM direct the relevant activities of S Ltd.Identify the correct statement(s) regarding control.(i) P Ltd holds the majority of the voting rights at the AGM.(ii) P ltd has the ability to use its majority voting rights at the AGM to affect its returns.(iii) P Ltd is not exposed to variable returns from S Ltd through dividends and the value of investment in S Ltd.(iv) P Ltd has control over S Ltd and S Ltd is a subsidiary of P Ltd.Select one:a.(i), (ii) and (iii)b.(i) and (iv)c.(i), (iii) and (iv)d.(i), (ii) and (iv)Indicate whether the following statements are true or false. If the statementis false, explain why.b. If you own 100 shares in a company’s stock and the company’s stocksplits 2-for-1, then you will own 200 shares in the company followingthe split.
- Xyna Company has 400,000 shares of common stock outstanding and is considering issuing another 100,000 shares through stock rights. Each current stockholder will obtain one right per share. Mr. A owns 40,000 shares of common stock. 1. What will Mr. A’s percentage interest in the company be after exercising all his rights? 2. Did his percentage ownership change after exercising his rights relative to what it was before the rights offering?If a company declares a 4-for-3 stock split, the price before the split is $60, and the price after the split is $45, show that a current shareholder is no better off after the split. Current shareholders are no better off after the 4-for-3 split because if they owned three shares at $60 per share before the split, they would then own ____ shares shares worth $45 each immediately after the split.If Candy Inc. is liquidated, how much would be received by Mr. Gwapo who holds 500 ordinary shares and 100 shares of 10% preference shares?
- Types of common stock In some cases, individuals who start a business have special voting rights that help them exercise more control over the firm. They own a special class of stock called (dual, founder) shares. Consider this case: The CEO of EchoStar Communications, Charlie Ergen, owned around 5% of the company’s stock, but his multiple votes per share gave him around 90% of the vote. Source: “Dish Network 2010 Annual Report,” on Dish Network Investor Relations, http://files.shareholder.com/downloads/DISH/1330128565x0x480914/DC45515A-D65F-475D-B6C2-CF83AE7A10D6/DISH_-_Web_Posting_-_3.30.11.pdf. Based on this example, which of the following statements is true? A. Classified shares are not issued with the purpose of providing super voting rights to a certain class of investors. B. Classified shares have super voting rights, which give more control to a certain class of investors.Anzio, Inc., has two classes of shares. Class B has 10 times the voting rights as Class A. If you own 16% of the Class A shares and 23% of the Class B shares, what percentage of the total voting rights do you hold?Which of the following scenario not demonstrate significant influence? Yijin Co. who owns 30% of the convertible preference shares of HeeDo Co. GHI Co. who owns 15% of the voting shares of JKL Co. ABC Co. who owns 30% of the voting shares of DEF Co. a. I only b. II only c. III only d. I and II
