An Investor Who Owns 15% of an Entity's Voting Shares

question 11

Multiple Choice

An investor who owns 15% of an entity's voting shares can

• A) potentially have influence over the investee if the shares are widely held.
• B) always be assumed to have little or no influence over the investee.
• C) be assumed to be using the cost model.
• D) be assumed to always use the equity method.

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Definitions:

American System

An economic plan advocated by Henry Clay in the early 19th century, emphasizing support for a national bank, high tariffs, and internal improvements to foster national economic growth.

Panic of 1819

The first major financial crisis in the United States, which occurred due to a sudden collapse of the economy, leading to bank failures and unemployment.

European Market

The combined economies of European countries, often referring to the single market in the context of the European Union.