Fleet, Inc. owns 85% of the stock of Pete, Inc. and 35% of the stock of Zete, Inc. The remaining stock of Pete and Zete is owned by unrelated individuals. Which of the following statements is correct?

Question

Quizplus · Accepted Answer

An affiliated group is a group of corporations connected through stock ownership such that one corporation owns at least 80% of the voting stock and at least 80% of the total value of the stock of another corporation.

In this case, Fleet, Inc. owns 85% of the stock of Pete, Inc., which meets the requirements for an affiliated group between Fleet and Pete. However, Fleet only owns 35% of the stock of Zete, which is not enough to form an affiliated group with Zete. Therefore, the correct answer is C - Fleet and Pete are an affiliated group.