For what reason would a company buy 10% of the common stock of a second company?
A)The company has idle cash and wishes to have a higher return than that available from temporary money market investments.
B)The company wishes to ensure a steady source of goods from the second company.
C)The company wishes to prepare consolidated financial statements.
D)None of these are correct.

Question

Quizplus · Accepted Answer

A company might buy 10% of another company's stock to invest idle cash and potentially earn a higher return than from temporary money market investments.

For What Reason Would a Company Buy 10% of the Common