Corporate Redemptions and Liquidations $($see bottom of page $424$ and top of page $425$ of the study guide$)$: In order for a redemption of stock to qualify as a sale as a substantially disproportionate redemption, the shareholder must pass two tests: the control test and the reduced interest test. A owns $100$ shares of $xYZ$ corporation $(1/2$ of the outstanding stock$).$ If $xYZ$ corporation redeems $10$ of A$\text{'}$s shares, the redemption would:

a$.$ Pass both the control test and the reduced interest test

b$.$ Pass the reduced interest test but not the control test

c$.$ Fail both the control test and the reduced interest test

d$.$ Pass the control test but not the reduced interest test