Asked by Candace Stubblefield on Jun 11, 2024
Verified
Which of the following would not be considered a motive for making a stock investment in another corporation?
A) Appreciation in the market value of the stock investment
B) Use of the investment for expanding its own operations
C) Use of the investment to diversify its own operations
D) An increase in the amount of interest revenue from the stock investment
Stock Investment
The act of buying shares in a company with the expectation of earning returns through dividends, capital gains, or both.
Market Value
The current price at which an asset, or service can be bought or sold in a marketplace.
Interest Revenue
Income earned from lending money or depositing funds in interest-bearing accounts.
- Contrast the approaches and accounting procedures for short-term vs. long-term investments.
Verified Answer
EC
Erika Chapman-LawrenceJun 13, 2024
Final Answer :
D
Explanation :
Interest revenue is typically generated from bonds or loans, not from stock investments. Therefore, an increase in the amount of interest revenue would not be a motive for making a stock investment in another corporation.
Learning Objectives
- Contrast the approaches and accounting procedures for short-term vs. long-term investments.
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