XYZ Buys a 24% Share in ABC for $80m

question 2

Multiple Choice

XYZ buys a 24% share in ABC for $80m.ABC's total net profit is $50m and it pays $4m in dividends to XYZ.Using the equity method,the value of the investment in ABC would be recorded at year-end as:

• A) $80m
• B) $88m
• C) $92m
• D) $19m.

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Definitions:

Fundamental Attribution Error

A cognitive bias that describes the tendency to overemphasize personality-based explanations for behaviors observed in others while underestimating the influence of external factors.

Jones and Harris

Refer to a classical study in social psychology that explored the fundamental attribution error, demonstrating how people tend to attribute others' behaviors to their dispositions rather than to situational factors.

Availability Heuristic

A mental shortcut that relies on immediate examples that come to mind when evaluating a specific topic, concept, method, or decision.

Celebrity Marriages

Marriages between individuals who are highly recognized or famous, often attracting public fascination and media attention.