A Non-Controlling Interest Arises Only When a Parent Company Purchases

question 16

Multiple Choice

A non-controlling interest arises only when a parent company purchases:

• A) more than 50% but less than 100% of the stock of a subsidiary company
• B) between 20% and 50% of the stock of a subsidiary company
• C) less than 20% of the stock of a subsidiary company
• D) all of the stock of a subsidiary company

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Definitions:

Equilibrium Quantity

The amount of goods or services available and sought after at the balance price.

Scalping

The practice of buying tickets, securities, or commodities for immediate resale at higher prices, often to exploit short-term fluctuations.

Equilibrium Level

The point at which market supply equals market demand, leading to a stable situation where there is neither excess demand nor excess supply.

Equilibrium Price

The price at which the quantity of a good or service supplied is equal to the quantity demanded, resulting in no net surplus or shortage in the market.