If an Investor Owns Between 20% and 50% of an Investee's

question 19

True/False

If an investor owns between 20% and 50% of an investee's ordinary shares, it is presumed that the investor has significant influence on the investee.

---

Definitions:

Flotation Costs

Expenses incurred by a company when it issues new securities, including fees to underwriters, legal fees, and registration fees.

WACC

The Weighted Average Cost of Capital (WACC) is a calculation of a firm's cost of capital, where each category of capital is proportionately weighted.

Tax Rates

The percentage at which an individual or corporation is taxed, which can vary based on the taxable amount or income.

Preferred Stock

A class of ownership in a corporation that has a higher claim on its assets and earnings than common stock, often with fixed dividends.