Question
Star Corporation has 1,000 shares of outstanding voting common stock. Shareholders A, B, C, D, and E are unrelated parties (no attribution under Sec. 318),
Star Corporation has 1,000 shares of outstanding voting common stock. Shareholders A, B, C, D, and E are unrelated parties (no attribution under Sec. 318), and each owns 200 shares. Star redeems 150 shares from A, 75 shares from B, and 25 shares from C (for a total of 250 redeemed shares or 25% of the total outstanding stock). Following the redemption, there are 750 outstanding shares, with A owning 50, B owning 125, C owning 175, and D and E each owning 200. Will the substantially disproportionate test be met for A, B or C? Show legal and computation analysis of how you arrived at your answer.
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