Phillips Corporation Purchased 1,000,000 Shares of Martin Corporation's Common Stock

question 28

Multiple Choice

Phillips Corporation purchased 1,000,000 shares of Martin Corporation's common stock, which constitutes 10% of Martin's voting stock on June 30, 2014 for $42 per share. Phillips' intent is to keep these shares beyond the current year. On December 20, 2014, Martin paid a previously declared $4,000,000 cash dividend. On December 31, Martin's stock was trading at $45 per share and their reported 2014 net income was $52 million. What investment value will be reflected on Phillips' balance sheet at December 31, 2014?

• A) $42,000,000.
• B) $45,000,000.
• C)$46,800,000.
• D)$47,200,000.

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