For Each of the Following Investments State What Type of Investment

question 80

Essay

For each of the following investments state what type of investment it is and how it would likely be accounted for.
A) Own 28,000 of 50,000 voting shares of a private company.
B) Bought 15,000 of 50,000 voting shares of a private company from a disgruntled partner.One person owns all the remaining shares.To date have been unable to get any representation on the board of directors.
C) Own 1,000 shares of the Toronto Dominion Bank, a large public company.Because they have a good record for dividend payments, management intends to hold the shares for a long time.
D) Own 5,000 of a public company as part of an investment portfolio managed to earn income.E) Own 33% of the shares of a private company with two other equal partners.
F) Own 20% of the shares but control 80% of the votes of a large public company.

• A) Own 28,000 of 50,000 voting shares of a private company.
• B) Bought 15,000 of 50,000 voting shares of a private company from a disgruntled partner.One person owns all the remaining shares.To date have been unable to get any representation on the board of directors.
• C) Own 1,000 shares of the Toronto Dominion Bank, a large public company.Because they have a good record for dividend payments, management intends to hold the shares for a long time.
• D) Own 5,000 of a public company as part of an investment portfolio managed to earn income.E) Own 33% of the shares of a private company with two other equal partners.
• F) Own 20% of the shares but control 80% of the votes of a large public company.

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Definitions:

Showrooming

The practice of visiting a store or stores in order to examine a product before buying it online at a lower price.

Best Price

The most favorable financial term offered on a product or service, often considered the lowest price offered among competitors.

Physical Store

A brick-and-mortar location where businesses sell their products or services directly to customers in person.

Near Field Communications

A set of communication protocols that enable two electronic devices, one of which is usually a portable device such as a smartphone, to establish communication by bringing them within a short distance of each other.