Question

Meredith inc. is a manufacturer of art supplies. the company has announced plans to enter into an equity strategic alliance with jazz paper to develop a line of specialty papers for use with a line of specialty paints meredith manufactures. which of the following would be the accurate interpretation of this announcement?
a. meredith will own a majority equity stake in the new venture.
b. jazz will own a majority equity stake in the new venture.
c. meredith or jazz will own an equal equity stake in the new venture.
d. either meredith or jazz will own a majority equity stake, but we do not know which one based on the announcement.

Answer 1

Answer:

D. Either Meredith or JaZz will own a majority equity stake, but we do not know which one based on the announcement.

Explanation:

Given the information/announcement on strategic alliance, it difficult to point out which of the two company will have a majority equity stake. So either the art company or the paper company will own majority equity stake but we cannot point out which of the two companies based on the announcement that was made concerning the alliance.

Answer 2

Answer:

d. either meredith or jazz will own a majority equity stake, but we do not know which one based on the announcement.

Explanation:

Meredith Inc announced that they are entering a strategic alliance with Jazz papert o develop a line of specialty papers for use with a line of specialty paints Meredith manufactures.

There is inference from this statement that an equity stake has been formed between the two companies but we cannot determine which of the companies will have majority equity stake.