Townsend Ltd.has the Following Shareholders

question 27

Multiple Choice

Townsend Ltd.has the following shareholders:
Palermo Co.- 60%
Nix Ltd.- 30%
Riley Ltd.- 10%
Nix does not conduct any business with Townsend,nor has it been able to secure a seat on the Board of Directors.Which of the following statements is true?

• A)Nix has significant influence over Townsend.
• B)Nix should consider Townsend to be a special purpose entity.
• C)Nix should consider Townsend to be an associated company.
• D)Nix should treat Townsend as a non-strategic investment.

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Definitions:

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