Find

question 3

Multiple Choice

Find

---

Definitions:

Equity Investment

Equity investment involves purchasing stocks or shares in a company, providing the investor with ownership interest and potentially dividends.

Cost Method

A method of accounting for equity investments representing less than 20% of the outstanding shares of the investee. The purchase is at original cost, and any gains or losses upon sale are recognized by the difference between the sale proceeds and the original cost.

Parent Company

The corporation owning all or a majority of the voting stock of the other corporation.

Voting Stock

Shares that grant the shareholder voting rights in corporate decisions, typically involving the election of the board of directors.