Stark Enters into a Contract with a Contractor to Build

question 29

Multiple Choice

Stark enters into a contract with a contractor to build a large shopping mall in River City. Donner will greatly benefit from this contract since his convenience store is adjacent to the mall. Donner in this instance is:

• A) an implied beneficiary.
• B) a partial beneficiary.
• C) a donee beneficiary.
• D) an incidental beneficiary.

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Definitions:

Pre-Acquisition Equity

Refers to the amount of equity held in a company before it is acquired by another entity, often considered in the evaluation of acquisition deals and the consolidation of financial statements.

Direct Non-Controlling Interest

An ownership interest in a company where the shareholder does not have enough shares to control the company directly, but still holds a significant amount of shares.

Post-Acquisition Equity

The equity interest in a subsidiary acquired by a parent company after the initial purchase date, affecting the parent's total equity interest in the subsidiary.

Pre-Acquisition Equity

The equity interest in a company before any acquisitions, typically involving the original shares and retained earnings before new investments.