Which of the Following Primarily Determines the Extent of Control

question 53

Multiple Choice

Which of the following primarily determines the extent of control exercised over an IJV by its parent company?

• A)staffing choices for top IJV positions
• B)policies of the smaller firm
• C)cultural background
• D)IJV industry

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Definitions:

Equity Method

An accounting technique used by companies to assess the profits earned by their investments in other companies, where the investment is recorded at original cost and adjusted for the investor's share of the investee's profit or loss.

Cash Dividend

A distribution of a company's earnings to shareholders in the form of cash.

Voting Common Stock

Shares that give the shareholder voting rights in corporate decisions, typically involving one vote per share owned.

Net Unrealized Gains/Losses

Represents the difference between the current market value of held investments and their original purchase prices, not yet realized through sales.