P Ltd owns 55% of the shares of S Ltd. Each share entitles the holder to one vote at the AGM. The decisions made at the AGM direct the relevant activities of S Ltd. Identify the correct statement(s) regarding control. (i) P Ltd holds the majority of the voting rights at the AGM. (ii) P ltd has the ability to use its majority voting rights at the AGM to affect its returns. (iii) P Ltd is not exposed to variable returns from S Ltd through dividends and the value of investment in S Ltd. (iv) P Ltd has control over S Ltd and S Ltd is a subsidiary of P Ltd. Select one: a. (i), (ii) and (iii) b. (i) and (iv) c. (i), (iii) and (iv) d. (i), (ii) and (iv)
P Ltd owns 55% of the shares of S Ltd. Each share entitles the holder to one vote at the AGM. The decisions made at the AGM direct the relevant activities of S Ltd. Identify the correct statement(s) regarding control. (i) P Ltd holds the majority of the voting rights at the AGM. (ii) P ltd has the ability to use its majority voting rights at the AGM to affect its returns. (iii) P Ltd is not exposed to variable returns from S Ltd through dividends and the value of investment in S Ltd. (iv) P Ltd has control over S Ltd and S Ltd is a subsidiary of P Ltd. Select one: a. (i), (ii) and (iii) b. (i) and (iv) c. (i), (iii) and (iv) d. (i), (ii) and (iv)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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P Ltd owns 55% of the shares of S Ltd. Each share entitles the holder to one vote at the AGM.
The decisions made at the AGM direct the relevant activities of S Ltd.
Identify the correct statement(s) regarding control.
(i) P Ltd holds the majority of the voting rights at the AGM.
(ii) P ltd has the ability to use its majority voting rights at the AGM to affect its returns.
(iii) P Ltd is not exposed to variable returns from S Ltd through dividends and the value of investment in S Ltd.
(iv) P Ltd has control over S Ltd and S Ltd is a subsidiary of P Ltd.
Select one:
a.
(i), (ii) and (iii)
b.
(i) and (iv)
c.
(i), (iii) and (iv)
d.
(i), (ii) and (iv)
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