A Controlling Influence Over the Investee Is Based on the Investor

question 127

Multiple Choice

A controlling influence over the investee is based on the investor owning voting stock exceeding:

• A) 20%.
• B) 40%.
• C) 50%.
• D) 10%.
• E) 30%.

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Definitions:

Par Value

The nominal or face value of a bond, share of stock, or other financial instrument, as stated by the issuer.

No Par Common Stock

Shares issued without a nominal or face value, where the value is determined by the price investors are willing to pay.

Stated Value

A value assigned to no-par value stock by the corporation's board, not based on market price but used for accounting purposes.

Issue Price

Issue price is the price at which a new set of securities, such as bonds or stock, is offered to the public for the first time.