Question regarding holding company


Usry Company holds stock in company A and company B and possesses voting control over both. Balance sheet data follow:

Usry Corporation

Investment


Long-term liabilities

$ 30,000

Company A

$ 20,000

Preferred stock

10,000

Company B

80,000

Common stock equity

60,000

Total

$100,000

Total

$100,000

Company A

Current assets

$200,000

Current liabilities

$100,000

Noncurrent assets

300,000

Long-term liabilities

200,000



Common stock equity

200,000

Total

$500,000

Total

$500,000

Company B

Current assets

$300,000

Current liabilities

$200,000

Noncurrent assets

400,000

Long-term liabilities

350,000



Common stock equity

150,000

Total

$700,000

Total

$700,000

(a) What is the percent of total assets controlled by Usry Corporation resulting from its common stock equity?

(b) Assuming another company owns 25 percent of the common stock of Usry and has voting control, what is the percent of the total assets controlled by the other firm's equity?

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Finance Basics: Question regarding holding company
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