Which of the Following Would NOT Normally Be Considered a Motive

question 26

Multiple Choice

Which of the following would NOT normally be considered a motive for making an equity investment in another corporation?

• A) to invest surplus cash
• B) use of the investment for expanding its own operations
• C) use of the investment to diversify its own operations
• D) an increase in the amount of interest revenue from the equity investment

---

Definitions:

Government-Granted Monopolies

These monopolies exist when a government gives exclusive rights to a single firm or entity to provide a good or service, often to ensure stability or to control quality and pricing.

Willingness to Pay

The maximum amount an individual is prepared to sacrifice to procure a good or avoid something undesirable.

Profit

The financial gain obtained when the revenue from business activities exceeds the expenses, costs, and taxes needed to sustain the activity.

Perfectly Price Discriminate

A pricing strategy where a seller charges the maximum possible price for each unit consumed that the buyer is willing to pay.