Question 1
Multiple ChoiceBenton Holdings Inc. (BHI) is a publicly traded firm that acts as the general partner for Benton LP, a limited partnership that owns 100% of a portfolio of commercial real estate assets. BHI owns an 85% stake in Benton LP, while the remaining 15% is held by various institutional investors.
BHI is structured to avoid corporate income taxes by distributing all net income to its shareholders and meeting certain regulatory conditions, which it has consistently fulfilled. The firm is controlled by the Laramie family, who collectively own 40% of BHI's shares and occupy several senior leadership roles. The rest of the shares are owned by unrelated public investors, none of whom hold more than 4%.
What percentage of the commercial real estate assets is effectively owned by the Laramie family?
Explanation
The Laramie family owns 40% of Benton Holdings Inc., which in turn owns 85% of Benton LP. Since Benton LP owns all of the real estate assets, the Laramie family's effective ownership is calculated as:
40% × 85% = 34%.
This reflects how indirect ownership through layered structures is calculated.