If a Company Owns More Than 20% of the Stock

question 146

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)Market value method
• C)Historical cost method
• D)Straight-line method
• E)Effective method

Understand the concept of compound interest and how it is applied to investments and loans.

Calculate the present value of annuities using financial tables or a calculator.

Determine the total present value of uniform series of payments or deposits.

Compute the necessary initial investment required to achieve a specific financial goal over a given period.

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Definitions:

Ethical Behaviour

Conduct that is consistent with what individuals or society consider to be good morals or values.

Long-Term Personal Consequences

The enduring effects or outcomes that actions or decisions can have on an individual’s personal life, career, or overall well-being.

Procedural Justice

The fairness of the processes that are used to make decisions and allocate resources.

Sexual Harassment

Unwanted or inappropriate sexual advances, requests for sexual favors, or other verbal or physical harassment of a sexual nature.