A Inc. owns 80% of B's outstanding voting shares. Under which of the following scenarios would A's ownership percentage of B change?

Question

Quizplus · Accepted Answer

A's ownership percentage of B would change only if there is an issuance or retirement of shares. In scenario A, a stock split does not affect the ownership percentage as the total number of outstanding voting shares will increase proportionally. In scenario B, A acquires 80% of the 8,000 new shares issued by B, maintaining their ownership percentage at 80%. In scenario D, the total number of outstanding voting shares will decrease, but as A is not selling any of their own shares, their ownership percentage will increase. Therefore, the only scenario where A's ownership percentage changes is in option C, where A acquires less than 80% of the new shares issued, resulting in a slightly lower ownership percentage.

A Inc Owns 80% of B's Outstanding Voting Shares