If an Investor Owns Less Than 20% of the Common

question 46

Multiple Choice

If an investor owns less than 20% of the common stock of another corporation as an 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.

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Definitions:

Strict Product Liability

Liability under which, courts may hold the manufacturer, distributor, or retailer liable for any reasonably foreseeable injured party.

Negligence Per Se

A legal doctrine where an act is considered negligent because it violates a statute or regulation.

Breach of Warranty

The failure to fulfill the terms of a promise or claim made regarding the quality or nature of a product or service.

Product Liability Lawsuit

A legal claim brought against a manufacturer, distributor, or seller for damages or injuries caused by a defective or dangerous product.