Ajak Corporation owns 85% of the single class of Utech Corporation stock. Utech Corporation owns 35% of Tech Corporation. Ajak Corporation also owns 50% of Tech Corporation, and Tech Corporation owns 75% of Baxter Corporation.
A)Ajak, Tech, Utech, and Baxter Corporations are an affiliated group.
B)Ajak, Tech, and Baxter Corporations are an affiliated group.
C)Ajak, Tech, and Utech Corporations are an affiliated group.
D)None of the above are correct.

Question

Quizplus · Accepted Answer

According to the rules of affiliation, a group must have at least 80% ownership between any two corporations in the group. Ajak owns 85% of Utech, which is more than 80%, establishing a connection between Ajak and Utech. Furthermore, since Ajak and Tech are both owners of Tech Corporation with a combined ownership of 100%, they are also affiliated. Finally, Tech Corporation owns 75% of Baxter Corporation, establishing a connection between Tech and Baxter. Therefore, Ajak, Tech, and Utech are an affiliated group. Baxter is not part of this group since it does not have more than 80% ownership between any other member of the group.

Ajak Corporation Owns 85% of the Single Class of Utech