Homework SourseRust Pipe Co was established in 1994 Four years later the co
Rust Pipe Co. was established in 1994. Four years later, the company went public. At that time, Robert Rust, the original owner, decided to establish two classes of stock. The first represents Class A founders\' stock and is entitled to fifteen votes per share. The normally traded common stock, designated as Class B, is entitled to one vote per share. In late 2010, Mr. Stone, an investor, was considering purchasing shares in Rust Pipe Co. While he knew the existence of founders’ shares were not often present in other companies, he decided to buy the shares anyway because of a new technology Rust Pipe had developed to improve the flow of liquids through pipes.
What is the percentage of the founder\'s family votes to Class B votes? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)
| Rust Pipe Co. was established in 1994. Four years later, the company went public. At that time, Robert Rust, the original owner, decided to establish two classes of stock. The first represents Class A founders\' stock and is entitled to fifteen votes per share. The normally traded common stock, designated as Class B, is entitled to one vote per share. In late 2010, Mr. Stone, an investor, was considering purchasing shares in Rust Pipe Co. While he knew the existence of founders’ shares were not often present in other companies, he decided to buy the shares anyway because of a new technology Rust Pipe had developed to improve the flow of liquids through pipes. |
| Of the 2,050,000 total shares currently outstanding, the original founder\'s family owns 53,025 shares. |
Solution
Founder\'s familyvotes=Shares owned ×15
= 53,025 ×15= 795375
Class B votes=Total shares – Founder’s family shares
=2,050,000 – 53,025= 1996975
Percentage of votes = Founder\'s family votes / Class B votes
= 795375 / 1,996,975
= 39.83%
