Question: Question 3 (1 point) Consider an ownership structure involving two companies: A and B) where Company A owns 30% of Company B's shares, and Company

 Question 3 (1 point) Consider an ownership structure involving two companies:

Question 3 (1 point) Consider an ownership structure involving two companies: A and B) where Company A owns 30% of Company B's shares, and Company B owns 20% of Company A's shares. The controlling family owns 5% of Company A's shares, 5% of Company B's shares, and manages Company A and B by holding the CEO position in these companies. Now the manager considers two restructuring plans to increase one of the cross ownership by 20% Plan 1: Company B owns 40% of Company A's shares (.e., increase Company B's ownership of Company A by 20%; other numbers remain the same) Plan 2: Company A owns 50% of Company B's shares (i.e., increase Company A's ownership of Company B by 20%; other numbers remain the same) Which plan gives higher cash flow from Company A (i.e., if Company A makes $100, the legal amount that the controlling family should receive) to manger? Plan 2 Plan 1 Both Plan 1 and 2 give same cash flow to the manager Changing ownership share of one company does not change for manager's cash flow

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