Brenda owns 600 shares of Eagle Corporation stock at a time when Eagle has 1,000 shares of stock outstanding.The remaining shareholders are unrelated to Brenda.What is the minimum number of shares Eagle must redeem from Brenda so that the transaction will qualify as a disproportionate redemption?

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Before the redemption,Brenda owns 60% of the outstanding shares of Eagle stock.To qualify as a disproportionate redemption,Brenda must own,after the redemption,less than 48% (80% F1F1F1S1F1F1F10 60%)of the remaining outstanding shares of Eagle stock.Using a simple algebraic formula [i.e.,(600 shares - X shares)÷ (1,000 shares - X shares)< 48%],the minimum number of shares (rounded up to the next whole number)that must be redeemed is 231 shares.

Brenda Owns 600 Shares of Eagle Corporation Stock at a Time