Which of the Following Statements Pertaining to the Non-Controlling Interest

question 2

Multiple Choice

Which of the following statements pertaining to the non-controlling interest (NCI) when using the identifiable net assets (INA) method is TRUE?

• A) The NCI value is based on the full fair value of the subsidiary including goodwill.
• B) The NCI value is based on the book value of the net identifiable assets of the subsidiary excluding any value pertaining to goodwill.
• C) The NCI value is based on the book value of the net identifiable assets of the subsidiary including goodwill.
• D) The NCI value is based on the fair value of the net identifiable assets of the subsidiary but excludes any value pertaining to goodwill.

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Definitions:

Capital Budgeting Projects

Capital budgeting projects are long-term investment decisions made by companies to invest in assets and projects for future growth and profitability.

Corporate WACC

Weighted Average Cost of Capital for a corporation, which is the average rate of return it must earn on its investments to maintain the value of its stock and pay its debt.

Expected Returns

The projected average return of an investment over a specified period, accounting for various possible outcomes.

After-Tax Cost of Debt

The net cost of debt to a company after accounting for the tax benefits of interest expenses.