What occurs when a company purchases 50% or more of another company's stock

A) Debt securities
B) Equity securities
C) Investor
D) Investee
E) Cost method
F) Trading securities
G) Available-for-sale securities
H) Held-to-maturity securities
I) Equity method
J) Business combination

Question

keziah buking · Accepted Answer

Final Answer : J, Explanation :  Business combination refers to the scenario when a company purchases 50% or more of another company's stock.Answer: IEquity method refers to an accounting technique that records investments in the equity securities of another company based on the investor's percentage of ownership. This method is often used when the investor owns between 20-50% of the investee's stock.Answer: BEquity securities refer to ownership interests in a company, such as common or preferred stock. This would be the type of security purchased in a business combination scenario.

What occurs when a company purchases 50% or more of another company's stock

A) Debt securities
B) Equity securities
C) Investor
D) Investee
E) Cost method
F) Trading securities
G) Available-for-sale securities
H) Held-to-maturity securities
I) Equity method
J) Business combination

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Learning Objectives

Related questions

What occurs when a company purchases 50% or more of another company's stockA) Debt securitiesB) Equity securitiesC) InvestorD) InvesteeE) Cost methodF) Trading securitiesG) Available-for-sale securitiesH) Held-to-maturity securitiesI) Equity methodJ) Business combination

Definitions

Learning Objectives

Learning Objectives

Related questions

What occurs when a company purchases 50% or more of another company's stock

A) Debt securities
B) Equity securities
C) Investor
D) Investee
E) Cost method
F) Trading securities
G) Available-for-sale securities
H) Held-to-maturity securities
I) Equity method
J) Business combination