Of the 9,500 shares of Favor Corporation stock outstanding, Olsen owns 6,100 shares. Unrelated parties own the

Question:

Of the 9,500 shares of Favor stock outstanding, Olsen owns 6,100 shares. Unrelated parties own the remaining shares. To bolster its stock price, Favor plans to reduce the total number of shares outstanding by redeeming some of the shares held by Olsen.
a. To qualify the redemption as “substantially disproportionate” and thereby make it eligible for sale treatment, how many of Olsen’s shares must Favor redeem?
b. How would your answer change if Olsen owns only 5,800 out of 9,500 shares before the redemption? Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...