Indicia of an investor's incapacity to exert significant influence over the policy-making decisions of an investee include:

A) the existence of a small group of 'non-investor' shareholders representing the majority of voting power in the investee.
B) the investor attempting to gain, but not gaining, board representation.
C) the investor attempting to gain, but not gaining, the financial information necessary to calculate its equity in the fair value of the investee's net assets at the date of acquisition, or its equity in the post-acquisition earnings of the investee.
D) all of the above.

Question

Ladonna Robinson · Accepted Answer

Final Answer : D, Explanation :  All of the options listed indicate that the investor does not have significant control or influence over the investee. Option A suggests that a small group of non-investor shareholders have majority control, meaning the investor's voting power is limited. Option B states that the investor attempted to gain board representation, which would have given them some level of control over decision-making, but failed to do so. Option C highlights the investor's inability to access financial information necessary to determine their stake in the investee's net assets or earnings, further indicating a lack of control. Therefore, all of these options suggest an investor's incapacity to exert significant influence over the policy-making decisions of an investee.

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