Firms sometimes invest in the common stock of other entities in order to exert significant influence or control over the other entity.U.S.GAAP and IFRS assume that firms owning between _____ of the voting stock of another entity can exert significant influence.
A)10% and 40%
B)15% and 45%
C)20% and 50%
D)25% and 55%
E)30% and 60%

Question

Quizplus · Accepted Answer

Both U.S. GAAP and IFRS consider a range of 20% to 50% ownership of voting stock as an indicator of significant influence over another entity. Therefore, the correct option is C) 20% and 50%.

Firms Sometimes Invest in the Common Stock of Other Entities