At what level of investment ownership is significant influence often presumed?
A) Greater than 20% of the voting stock of the investee
B) Between 20% and 50% of the voting stock of the investee
C) Greater than 50% of the voting stock of the investee
D) Greater than 20% of the voting stock or of the fair value of the investee

Question

Quizplus · Accepted Answer

Ownership between 20% and 50% is often sufficient. However, significant influence can also exist when ownership is less than 20%, if the investor company gains a seat on the board of directors due to its investment, or if the investor controls some sort of technical know-how or patents that the investee uses.

At What Level of Investment Ownership Is Significant Influence Often