Given the phrasing of the question, if one is but the other isn’t, payout would be 0?

I would believe payout would be 1 since the question implies both must be operating.

No, the question is asking whether both would still be functioning as shareholder-owned companies, so the payout would be 0 if only one is still operation as such.

Yes, in that case, payout would be 0.

Also, if the government buys new stock but leaves existing public shareholders with a 5-10% ownership position, how would that pay out?

In that case, the payout would be 1 because the companies would still be operating as shareholder-owned companies. It doesn’t matter if one of those shareholders is the US government, regardless of the percent ownership.

My bad, I see how the first question was phrased now. I agree with you Larosa on both needing to be shareholder owned to be a payout of 1.

However, on the government potentially owning all of them and still being shareholder owned, I believe this may be an issue of semantics, important semantics though. Since they are both publicly traded now, and if the government were, to say, take over one or both entirely, becoming the only shareholder, what is the alternative the question envisions? That they’d be liquidated?

That seems a bit ludicrous. Shareholder owned implies continued publicly traded shares.

This is not an issue of semantics. A company is designated as shareholder-owned regardless of how many shareholders it has. The stock can even continue to be publicly listed even though the single shareholder may choose not to sell any shares at any price. If the single shareholder chose to no longer publicly offer the stock, the entity would still be shareholder-owned; it would simply be a private shareholder-owned corporation rather than a public one. The alternatives that the question envisions would be, as you mentioned, liquidation as well as being taken over by the government and converted into a full-fledged agency of the government such as Ginnie Mae, in which case they would by definition no longer be a shareholder-owned corporation. I hope that clears everything up.

That sounds semantical to me.

You said, “I believe this may be an issue of semantics.” And, according to your explanation, your issue did indeed deal with semantics (i.e. the interpretation of the idea of being ‘shareholder-owned’). However, I am explaining that the determination will be based upon the formal definition of a shareholder-owned entity according to current US corporate law and will, therefore, remove the potential for any confusion due to interpretation of meaning (i.e. semantics). You are incorrectly assuming that a shareholder-owned entity is the same of a public-traded shareholder-owned entity, which is not the case. According to modern US corporate law, an entity is defined as shareholder-owned whether it is ‘public’, the shares of which are bought and sold by the general public on a public stock exchange, or ‘closely-held’, for which no ready market exists for the trading of its shares. That was my intended meaning and the reason I did not use the term ‘publicly traded’. I hope that clarifies the goal/intention of this market.