Which of the Following Is/are True Regarding Minority, Active Investments

question 36

Multiple Choice

Which of the following is/are true regarding minority, active investments?

• A)An investor acquires common shares of an investee with the intent of exerting significant influence over the investee's activities, perhaps through representation on the investee's board of directors.
• B)An investor can exert significant influence over an investee with ownership of less than a majority of the voting stock, because many different individuals or entities own most publicly held corporations, and those owners typically do not collaborate in voting their shares.
• C)U.S.GAAP and IFRS view investments of between 20% and 50% of the voting stock of another company as minority, active investments unless evidence indicates that the investor cannot exert significant influence.
• D)Minority, active investments appear as noncurrent assets on the balance sheet.
• E)all of the above

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Definitions:

Lower Price Buyers

Consumers who prioritize purchasing goods or services at the lowest possible price, often sacrificing quality or brand recognition in the process.

Capacity

The maximum amount of something that a facility, system, or process can contain or produce within a given time.

Marginal Revenue

The increase in revenue that results from the sale of one additional unit of output, important for making decisions about production and pricing.

Price Segment

A subset of the market tailored to a specific price range, accommodating customers with different willingness to pay.