When one corporation has control over another corporation, the investor corporation
A) is referred to as an associate.
B) is referred to as the subsidiary.
C) can determine the investee's strategic operating and financing policies.
D) must have obtained at least 50% of the investee's issued common shares.

Question

Quizplus · Accepted Answer

C) is correct because when one corporation has control over another, it means it has significant influence and can determine the strategic operating and financing policies of the investee. Control is often, but not exclusively, achieved through the ownership of more than 50% of the voting shares, but the definition of control focuses on the influence over policies rather than a specific percentage of ownership.

When One Corporation Has Control Over Another Corporation, the Investor