18.12 Holding company Scully Corporation holds enough stock in company A and company B to give it voting control of both firms. Consider the accompanying simplified balance sheets fore these companies

Liabilities and stockholders equity
Scully Corporation
Common stock holdings	Long-term debt $40,000
Company A	Preferred stock 25,000
Company B	Common stock equity 35,000
Current assets Fixed assets Total Current assets Fixed assets Total	Company A $180,000 400,000 Company B 720,000	Total $100,000 Current liabilities $100,000 Long-term debt 200,000 Common stock equity 200,000 Total $500,000 Current liabilities $100,000 Long-term debt 500,000 Common stock equity 300,000 Total 900,000

a) What percentage of the total assets controlled by Scully Corporation dose its common stock equity represents.

b) If another company owns 15% of the common stock of Scully Corporation and, by virtue of this fact, has voting control, what percentage of all the total assets controlled dose the outside companys equity represents?

c) How does a holding company effectively provide a great deal of control for a small dollar investment?

d) Answer parts a, and b in light of the following facts.

1) Company A,s fixed assets consist of $20,000 of a common stock in Company C. This level of ownership provides voting control.

2) Company C,s total asset of $400,000 includes $15,000 of stock in company D, which gives company C voting control over Company D,s $50,000 of total assets.

3) Company B,s fixed assets consist of $60,000 of stock in both Company E and F. In both cases, this level of ownership gives it voting control. Company E and F have total assets of $300,000 and $400,000 respectly.

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