Bela Ltd Has Invested in Several Domestic Manufacturing Corporations

question 12

Multiple Choice

Bela Ltd. has invested in several domestic manufacturing corporations. Which of the following investments would most likely be accounted for under the equity method on Bela's financial statements?

• A)A holding of 15,000 of the 50,000 outstanding common shares of Earthwise Co.
• B)A holding of 3,000 of the 10,000 outstanding preferred shares of Earthbent Co.
• C)A holding of 5,000 of the 60,000 outstanding common shares of Earth-Kind Co.
• D)A holding of 20,000 of the 25,000 outstanding common shares of Earth-Clean Co.

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Definitions:

Supply Curve

Graphically represents the relationship between the price of a good and the quantity of that good that suppliers are willing and able to sell.

Quantity

The amount or number of a material or product available or produced.

Price

The expenditure foreseen, necessary, or allocated in trading for something.

Socially-Optimal Quantity

The level of production that maximizes societal welfare, considering both the benefits and costs of production and consumption.