If an Investor Owns Less Than 20% of the Common

question 123

Multiple Choice

If an investor owns less than 20% of the common stock of another corporation as a long-term investment

• A) the equity method of accounting for the investment should be employed.
• B) no dividends can be expected.
• C) it is presumed that the investor has relatively little influence on the investee.
• D) it is presumed that the investor has significant influence on the investee.

Comprehend the concept of privity of contract and its implications on contractual rights.

Distinguish between donee, creditor, and incidental beneficiaries in the context of contract law.

Identify conditions under which certain contractual rights cannot be assigned.

Know the legal outcomes related to disputes involving assignments and third-party rights.

---

Definitions:

Avoidance Motivation

An emotional and cognitive state that drives an individual to evade or escape negative outcomes, threats, or discomfort.

Relatedness

In psychology, the need to engage in warm relations with others, considered a fundamental aspect of human motivation that influences behavior and mental health.

Autonomy

The capacity to make an informed, uncoerced decision independently.

Competence

The ability to do something successfully or efficiently, often linked to skills and knowledge in a specific area.