Jambon Company Owns 10% Interest in the Stock of Fanth

question 57

Multiple Choice

Jambon Company owns 10% interest in the stock of Fanth Corporation. During the year, Fanth pays $12,000 in dividends to Jambon, and reports $200,000 in net income. Jambon Company's investment in Fanth will increase Jambon net income by

• A) $20,000.
• B) $19,200.
• C) $12,000.
• D) $8,000.

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Definitions:

Glass-Steagall Act

A U.S. law enacted in 1933, which separated commercial banking from investment banking, repealed in 1999.

1999 Repeal

Refers to the revocation of a law or act; often mentioned in economic contexts, such as the repeal of financial regulations or acts in 1999.

Financial Crisis

A situation where the value of financial institutions or assets drops rapidly, leading to a loss of wealth, reduced access to credit, and, in some cases, bank failures.

Central Banks

Institutions that manage the currency, money supply, and interest rates of a state or country.