Ownership structure Consider an ownership structure (involving two firms A and B) where Company A owns 50% of Company B's shares, and Company B owns 25% of Company A's shares. The controlling family owns 1% of Company A's shares, 1% of Company B's shares, and manages Company A and B by holding the CEO position in these companies. If you need, the formula for infinite sum is: (1+x+x2+ x3+ x4+ 5+ x6+....)=1/(1-x). 

 

Estimate the cash flow rights of the controlling family. To be more specific, if Company B makes $200, how much is the legal amount that the controlling family should receive?

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Firm A 1% 50% 25% Firm B 1% Manager Firm A 1% 50% 25% Firm B 1% Manager

Answer rating: 100% (QA)

Direct control of controlling family in Comp... View the full answer