Answer:
An investor that owns 20% or more (but no more than 50%) of a company's voting stock is usually perceived to have significant influence over the investee
Explanation:
When a company owns 20% but not more than 50% voting stock of another company, the investor accounts and reports such equity investment in its own books using equity accounting.
The investor reports investee's profits in its books in proportion to it shareholding in the investee company.In other words,its original investment increases to the tune of share of profits received.
However,having more than 50 % voting stock gives right to controlling influence,hence the investee is a subsidiary of the investor
Answer:
An investor that owns 20% or more (but no more than 50%) of a company's voting stock is usually presumed to have a significant influence over the investee.
Explanation:
This is something extremely relative and depends on the size of the corporation, the total amount of stockholders and the stock classes. Some stock classes give higher voting power to their owners, for example Zuckerberg possesses 88% of F@cebook's class B stocks which gives him more than 50% of voting power but they are less than 20% of the total stocks. Sergey Brin and Larry Page own class C stocks in Google which give them more voting rights than the rest of the stockholders which own much more outstanding stocks.
For many large corporations, the SEC requires that investors holding 5% of total outstanding stock make their position public since they are considered to have significant control.
