Consider a corporation that was originally 100% family owned.Which of the following statements is TRUE?
A)Each time the company issues new shares family control may be reduced.
B)If the family owns more than 50% of the shares they still have effective control of the firm.
C)Even if the family owns less than 50% of the outstanding shares they may still retain effective control of the firm,especially if there are no other large shareholders.
D)All of the above are true.

Question

Quizplus · Accepted Answer

Each statement is true regarding family ownership and control in a corporation. A) Issuing new shares can dilute the family's ownership percentage, potentially reducing their control. B) Owning more than 50% of the shares generally allows for maintaining effective control, as it ensures a majority in voting matters. C) Even with less than 50% ownership, the family can retain control, especially if the remaining shares are widely dispersed among many small shareholders, preventing any single entity from challenging the family's control.

Consider a Corporation That Was Originally 100% Family Owned