Question

Why might a company invest in another​ company? A. To ensure a steady supply of raw materials if the company being purchased is a supplier of those raw materials B. To earn interest revenue C. To earn dividend income D. All of the above

Answer 1

Answer:

The answer is D.

Explanation:

A company might invest in another company to:

1. ensure a steady supply of raw materials if the company being purchased is a supplier of those raw materials. The company might be experiencing shortages of raw materials or outrageous increase in price of the raw materials. So acquiring a supplier of this raw materials will be a good option.

2. earn interest revenue. This can be one of the objectives too.

3. earn dividend income. Investment or shareholding in companies will lead to receiving dividend from such country.