Andy owns 20% of North Corporation and 60% of Tent Corporation. North and Tent have only one class of stock outstanding. Barbara owns 50% of North Corporation and 20% of Tent Corporation. North and Tent Corporations will be brother-sister corporations if

Question

Quizplus · Accepted Answer

For North and Tent Corporations to be brother-sister corporations, no more than 50% of the voting power can be owned by one shareholder. Currently, Andy owns 20% of North and 60% of Tent for a total voting power of 62%. Barbara owns 50% of North and 20% of Tent for a total voting power of 35%. If Andy acquires an additional 10% of North stock, his total voting power in North will be 30%, and his total voting power in both corporations will be 52%. At the same time, if Barbara acquires an additional 10% of Tent stock, her total voting power in Tent will be 30%, and her total voting power in both corporations will be 55%. Therefore, option C is the best choice.

Andy Owns 20% of North Corporation and 60% of Tent