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The 2016 annual report for Mega Mills disclosed that 1 billion shares of common stock have been authorized. At the end of 2015, 770 million shares had been issued and the number of shares in treasury stock was 99 million. During 2016, the only common share transactions were that 16 million common shares were reissued from treasury and 22 million common shares were purchased and held as treasury stock. Required: Determine the number of common shares (a) issued, (b) in treasury, and (c) outstanding at the end of 2016.

User Mrexodia
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2 Answers

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Final answer:

The minimum number of investors required to vote to change the company's top management is 3. Investors 1 and 2 cannot be certain of always getting their way in how the company will be run.

Step-by-step explanation:

The Darkroom Windowshade Company has 100,000 shares of stock outstanding. To determine the minimum number of investors it would take to vote to change the company's top management, we need to calculate the total number of shares held by investors other than investors 1 and 2.

Investor 1 holds 20,000 shares and investor 2 holds 18,000 shares, so the combined total of their shares is 38,000. The remaining investors hold 15,000 + 10,000 + 7,000 + (5,000 * 6) = 63,000 shares. To achieve a majority vote, we need to find the smallest number of investors who together hold more than 50,000 shares. Since the remaining investors hold a total of 63,000 shares, it would take a minimum of 3 additional investors to vote together to change the company's top management.

Investors 1 and 2 can be certain of always getting their way in how the company will be run if they have more than 50% of the total shares. To determine if they have more than 50%, we calculate the total number of shares held by all investors, which is 20,000 + 18,000 + 15,000 + 10,000 + 7,000 + (5,000 * 6) = 100,000 shares. The shares held by investors 1 and 2 represent 20,000 + 18,000 = 38,000 shares. Since 38,000 is less than 50% of 100,000, investors 1 and 2 cannot be certain of always getting their way in how the company will be run.

User Fabio Dalla Libera
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Answer:

a) Share issued = 770 million

b) Treasury stock = 105 million

c) Share outstanding = 665 million

Step-by-step explanation:

As per the data given in the question,

Disclosed shares = 1 billion

Share in treasure stock = 99 million

Issued share = 16 million

Purchased shares = 22 million

Issued stock is same at 770 million

Treasury stock = 99 million - 16 million + 22 million

= 105 million

Share outstanding = 770 million - 105 million

= 665 million

User Dsrdakota
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