Question

Derk owns 960 shares of stock in Rose Corporation. The remaining 2,240 shares of Rose are owned as follows: 320 by Derk's daughter Rosalie, 640 by Derk's aunt Penelope, and 1,280 by a partnership in which Derk holds an interest of 90%. Determine the number of shares that Derk owns (directly and indirectly) in Rose Corporation. Derk is deemed to own (directly and indirectly) __________ shares in Rose Corporation.

Answer 1

2,432 shares

Step-by-step explanation:

Calculation to determine the number of shares that Derk owns (directly and indirectly) in Rose Corporation

First step is to determine the Shares in partnerships holding

Using this formula

Shares in partnerships holding = Interest rate * Partnership

Let plug in the formula

Shares in partnerships holding = 90% * 1,280

Shares in partnerships holding = $1152

Now let determine the Total shares deemed to be own

Total shares deemed to be own = Own shares + Daughter shares + Shares in partnerships holding

Let plug in the formula

Total shares deemed to be own = 960 + 320 + 1152

Total shares deemed to be own = 2432

Therefore Derk is deemed to own (directly and indirectly) 2432 shares in Rose Corporation.