Which of the following requirements must be met for a redemption to be treated as substantially disproportionate?
A)The shareholder must own less than 50% of the outstanding stock (in terms of voting power)after the redemption.
B)After the redemption, the shareholder must own less than 80% of his percentage ownership of voting stock prior to the redemption.
C)After the redemption, the shareholder must own less than 80% of his percentage ownership of common stock (voting and nonvoting)prior to the redemption.
D)All of the above must be met.

Question

Quizplus · Accepted Answer

All of the requirements must be met for a redemption to be considered substantially disproportionate. The shareholder must own less than 50% of the outstanding stock (in terms of voting power) after the redemption, less than 80% of their percentage ownership of voting stock prior to the redemption, and less than 80% of their percentage ownership of common stock (voting and non-voting) prior to the redemption.

Which of the Following Requirements Must Be Met for a Redemption