Question

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 eight 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 1,700,000 total shares currently outstanding, the original founder's family owns 52,325 shares.

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.)
  

Answer 1

	Class	No of shares	Vote entitlement	Total Vote
Founder Family Shares	Class A	52,325	8	418,600
Normal Shares	Class B	1,647,675	1	1,647,675
		1,700,000		2,066,275
Voting share of Family	=418600/2066275
	20.26%
Voting share of Family to Class B votes	=418600/1647675
	25.41%