Townsend Ltd. Has the Following Shareholders: Palermo Co.-60

question 16

Multiple Choice

Townsend Ltd. has the following shareholders: Palermo Co.-60%
Nix Ltd.-30%
Riley Ltd.-10%
Nix has two seats on Townsend's five-person board of directors. Which of the following statements is true?

• A)Nix has significant influence over Townsend.
• B)Nix has control over Townsend.
• C)Townsend is a special purpose entity to Nix.
• D)Nix should treat Townsend as a passive investment.

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Definitions:

Consistent

This term refers to arguments or sets of statements that do not contain any contradictions between them.

Truth Value

The attribute of a statement that denotes its correctness or falsity.

Truth Tables

Truth tables are logical tools used to systematically explore the possible truth values of propositions depending on the truth values of their components.

Contradictory

Relates to two statements that cannot both be true at the same time, indicating a relationship where the truth of one necessitates the falsity of the other.