Asked by Florence Pochon on May 08, 2024
Verified
A company may purchase a noncontrolling interest in another firm in a related industry
A) to house excess cash until needed.
B) to generate earnings.
C) for strategic reasons.
D) for speculative reasons.
Noncontrolling Interest
An ownership position in a corporation in which the shareholder does not have sufficient voting power to enact changes or control the company’s operations.
Strategic Reasons
The underlying motives or rationales that guide a company's decisions and actions to achieve long-term objectives and competitive advantage.
Speculative Reasons
Motivations for making investments based on the expectation of substantial returns in the future, despite the risk of significant losses.
- Fathom the justification and incentives underlying company investments.
- Differentiate among diverse types of investment options and their purposes.
Verified Answer
Learning Objectives
- Fathom the justification and incentives underlying company investments.
- Differentiate among diverse types of investment options and their purposes.
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