Question

1. Taub Co. and Laughlin Co. own 80% and 20%, respectively, of the common shares that carry voting rights at a general meeting of shareholders of Renwill Co. Taub sells one half of its interest to Renwill and buys call options from Renwill that are exercisable at any time at a premium to the market price when issued, and if exercised would give Taub its original 80% ownership interest and voting rights.
2. Companies Taub, Laughlin, and Midas Ltd. own 40%, 30%, and 30%, respectively, of the common shares that carry voting rights at a general meeting of shareholders of Renwill. Taub also owns call options that are exercisable at any time at the fair value of the underlying shares and if exercised would give it an additional 20% of the voting rights in Renwill and reduce Laughlin’s and Midas’s interests to 20% each. If the options are exercised, Taub will have control over more than one half of the voting power.
3. Entities Taub, Laughlin, and Midas own 25%, 35%, and 40%, respectively, of the common shares that carry voting rights at a general meeting of shareholders of Renwill. Entities Taub and Laughlin also have share warrants that are exercisable at any time at a fixed price and provide potential voting rights. Taub has a call option to purchase these share warrants at any time for a nominal amount. If the call option is exercised, Taub would have the potential to increase its ownership interest, and thereby its voting rights, in Renwill to 51% (and dilute Laughlin’s interest to 23% and Midas’s interest to 26%).
4. Companies Taub, Laughlin, and Midas each own 331/3% of the ordinary shares that carry voting rights at a general meeting of shareholders of Renwill. Companies Taub, Laughlin, and Midas each have the right to appoint two directors to the board of Renwill. Taub also owns call options that are exercisable at a fixed price at any time and if exercised would give it all the voting rights in Renwill. The management of Taub does not intend to exercise the call options, even if Midas and Laughlin do not vote in the same manner as Taub.
Required
For each of the independent situations illustrated above, describe the reporting by Taub Co.


$1.99
Sales0
Views120
Comments0
  • CreatedJune 09, 2015
  • Files Included
Post your question
5000