If a Company Acquires a 40% Interest in Another Company

question 43

Multiple Choice

If a company acquires a 40% interest in another company

• A)the equity method is usually applicable.
• B)it would always have a controlling interest.
• C)the fair value model is usually applicable.
• D)the investor does not have the ability to exert significant influence over the investee.

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Definitions:

Beta Cells

Cells located in the pancreas that produce insulin, a hormone that regulates blood glucose levels.

Insulin

A substance secreted by the pancreas that controls blood sugar levels by assisting in the absorption of glucose by the body's tissues.

Glucagon

A hormone produced by the pancreas that raises blood glucose levels by promoting glycogen breakdown in the liver.

Hyperglycemia

An elevated level of glucose in the blood, often indicative of diabetes.