Final answer:
Form 13D is needed for investors who acquire over 5% of common stock and file it with the SEC. In the Darkroom Windowshade Company scenario, investors 1 and 2 do not have a majority even when combined; they would need additional shareholders to have conclusive decision-making power. The correct option is A.
Step-by-step explanation:
Form 13D is required for any investor that acquires more than 5% of the common stock of a reporting company and is filed with the SEC. When a firm becomes a public company by deciding to sell stock that financial investors can buy and sell, shareholders own the company.
Shareholders usually consist of a large group of investors who vote for a board of directors. These directors are responsible for hiring top executives to manage the company's day-to-day operations. The number of shares a shareholder owns directly correlates to their voting power regarding the board of directors.
Looking at the Darkroom Windowshade Company with 100,000 shares outstanding, to change the company's top management, investors would need to secure more than 50% of the vote. Investors 1 and 2, holding 20,000 and 18,000 shares respectively, together have 38,000 shares.
Although they hold a substantial percentage, they don't have over 50% and thus cannot be certain of always getting their way in how the company is run unless they partner with at least one more shareholder.
Hence, Option A is correct.