Zahra Corporation holds enough stock in Company A and Company B to give it voting control of both firms. Consider the accompanying simplified balance sheets for these companies.

a. What percentage of the total assets controlled by Zahra Corporation does its common stock equity represent?
b. If another company owns 15 percent of the common stock of Zahra Corporation and, by virtue of this fact, has voting control, what percentage of the total assets controlled does the outside company's equity represent?
c. How does a holding company effectively provide a great deal of control for a small dollar investment?
d. Answer parts a and b in light of the following additional facts.
(1) Company A's fixed assets consist of US$20,000 of common stock in Company C. This level of ownership provides voting control.
(2) Company C's total assets of US$400,000 include US$15,000 of stock in Company D, which gives Company C voting control over Company D's US$50,000 of total assets.
(3) Company B's fixed assets consist of US$60,000 of stock in both Company E and Company F. In both cases, this level of ownership gives it voting control. Companies E and F have total assets of US$300,000 and US$400,000, respectively.

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Liabilities and Stockholders' Equity Zahra Corporation Common stock holdings Long-term debt Preferred stock Company A Company IB Total USS 40,000 60,000 US$100,000 USS 40,000 25,000 35,000 USS100,000 Common stock equity Total Company A Current assets Fixed assets US$100,000 400,000 USS500,000 Current liabilities Long-term debt Common stock equity US$100,000 200,000 200,000 USS500,000 Total Total Company B US$180,000 720,000 US$900,000 US$100,000 500,000 300,000 USS900,000 Current assets Fixed assets Current liabilities Long-term debt Common stock equity Total Total