If a Company Owns More Than 20% of the Stock

question 12

Multiple Choice

If a company owns more than 20% of the stock of another company and the stock is being held as a long-term investment,which method would the investor normally use to account for this investment?

• A)Equity method.
• B)Fair value method.
• C)Historical cost method.
• D)Cost with amortization method.
• E)Effective method.

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Definitions:

Autocratic, Hierarchical Model

The autocratic, hierarchical model describes an organizational structure where decisions are made by a single leader or a small group of leaders at the top, with strict control over subordinates.

Empowering, Participatory Model

a leadership approach that involves engaging team members in decision-making processes, thereby enabling them to contribute their ideas and take active roles in the organization.

Leadership Equation

A formula or concept that identifies and combines the key factors contributing to effective leadership.

Elements of Caring Leadership

The components that make up a leadership style focused on understanding, empathizing with, and supporting team members to foster a positive and productive work environment.