Final answer:
The question pertains to the business subject, specifically dealing with stock transactions, present value calculations, and shareholder voting power within a company.
Step-by-step explanation:
The question involves understanding stock transactions, stock splits, and present value (PDV) calculations to arrive at standardized company valuations and the determination of net profits from stock transactions. It also deals with the voting power and control that different shareholders have within a company based on the number of shares owned.
Example of Net Profit Calculation
To calculate the net profit from a stock transaction, you would need to subtract the original purchase cost and any transaction fees from the selling price multiplied by the number of shares. For instance, if you purchased 1000 shares of a stock at $24.50 per share and sold them at $39.75 per share, while paying a transaction fee of $9.99, your net profit would be calculated as follows:
((1000 shares × $39.75 per share) – (1000 shares × $24.50 per share)) – $9.99 transaction fee
Determining Investor Control
When determining whether a group of investors can change a company's top management, the essential measure is whether they hold a majority of the voting shares. For instance, if Investor 1 and Investor 2, holding 20,000 and 18,000 shares respectively, vote together, they collectively hold 38,000 shares. To ensure control, they would need a majority of the 100,000 shares outstanding, meaning they need more than 50,000 shares under their control. In this case, without additional support, they cannot be certain of always getting their way in how the company is run.