Erin,Sarah,and Timmy are equal partners in EST Partnership.Sarah also owns 40% of Elton Corporation.The remaining shareholders of Elton Corporation are: Erin (24%)and Sarah's uncle (36%).What percent ownership does Sarah directly or constructively own in Elton Corporation?
A)40%
B)64%
C)76%
D)100%

Question

Quizplus · Accepted Answer

Sarah directly owns 40% of Elton Corporation.
Sarah also indirectly owns 24% of Elton Corporation through her 1/3 ownership in EST Partnership (which owns 100% of Erin's 24% ownership).
Therefore, Sarah's total ownership in Elton Corporation is 40% + 24% = 64%.

Erin,Sarah,and Timmy Are Equal Partners in EST Partnership