An associate is an entity in which an investor has significant influence over the investee. Which the following indicate the presence of significant influence? (I) The investor owns 660,000 of the 3,000,000 equity voting shares of the investee. (II) The investor has representation on the board of directors of the investee. (Ill) The investor is able to insist that all of the sales of the investee are made to a subsidiary of the investor. (IV) The investor controls the votes of a majority of the board members. Choose one of the correct pair. Please provide your explaination A) (I) , (II) B) (II), (Ill), (IV) C) (I), (III), (IV) D) (I), (II), (III), (IV) E) None of the above.
An associate is an entity in which an investor has significant influence over the investee. Which the following indicate the presence of significant influence? (I) The investor owns 660,000 of the 3,000,000 equity voting shares of the investee. (II) The investor has representation on the board of directors of the investee. (Ill) The investor is able to insist that all of the sales of the investee are made to a subsidiary of the investor. (IV) The investor controls the votes of a majority of the board members. Choose one of the correct pair. Please provide your explaination A) (I) , (II) B) (II), (Ill), (IV) C) (I), (III), (IV) D) (I), (II), (III), (IV) E) None of the above.
Chapter18: Corporations: Organization And Capital Structure
Section: Chapter Questions
Problem 11DQ
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An associate is an entity in which an investor has significant influence over the investee. Which the following indicate the presence of significant influence?
(I) The investor owns 660,000 of the 3,000,000 equity voting shares of the investee.
(II) The investor has representation on the board of directors of the investee.
(Ill) The investor is able to insist that all of the sales of the investee are made to a subsidiary of the investor.
(IV) The investor controls the votes of a majority of the board members.
Choose one of the correct pair. Please provide your explaination
A) (I) , (II)
B) (II), (Ill), (IV)
C) (I), (III), (IV)
D) (I), (II), (III), (IV)
E) None of the above.
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