BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

Solutions

Chapter
Section
BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
6 views

Why do companies purchase securities of other corporations?

To determine

Identify the reason for which the companies use to purchase securities of other corporations.

Explanation

Investment: It refers to the process of using the currently held excess cash to earn profitable returns in future. The investments can be made in equity securities such as shares or debt securities such as bonds.

Identify the reason for which the companies use to purchase securities of other corporations are:

  • To earn additional revenue through investing idle cash in securities.
  • Type of additional revenue can be earned through the investment in securities are interest, capital gains on sale of investment, or dividends.
  • To create a strong competition through constructing strategic long-term relationships with the investee. Such investee may be a customer, other corporation, or a supplier. Through this long-term relationship an investing company can exercise significant influence over the investee’s activities.

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

FINANCIAL STATEMENTS, CASH FLOW, AND TAXES Laiho Industries' 2013 and 2014 balance sheets (in thousands of doll...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

Which adjusting entries are reversed by ToyJoy?

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)

What is target costing? What role does it have in life-cycle cost management?

Cornerstones of Cost Management (Cornerstones Series)

Find all the answers to your study problems with bartleby.
Textbook solutions plus Q&A. Get As ASAP arrow_forward