Rushmore Limited, a distributor of leather raw materials, currently owns 15 percent of the outstanding common shares of Mount Limited.Bush Limited and Trailco respectively own 52 percent and 33 percent of the outstanding common shares of Mount Limited.Mount Limited, a large shoe manufacturer, has had several years of large losses. Which one of the following percentages represents the minimum percentage of addi- tional common shares of Mount Limited that Rushmore Limited must purchase in order that there be an acquisition of control?

Question

Quizplus · Accepted Answer

Rushmore Limited currently owns 15% of Mount Limited. To acquire control, it needs more than 50% of the shares. Since Bush Limited owns 52%, Rushmore needs to surpass this. Therefore, Rushmore needs at least 36% additional shares to reach 51% (15% + 36% = 51%).

Rushmore Limited, a Distributor of Leather Raw Materials, Currently Owns