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In determining whether the equity method should be applied to an investment in common stock, an...

In determining whether the equity method should be applied to an investment in common stock, an investor should consider whether it can exercise significant influence. Significant influence is characterized by certain quantitative factors (20% ownership) and qualitative factors. What are the six qualitative factors an investor should consider?

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Answer : in determining weather to opt for equity method in an investment in an company the qualitative factors to be considered are

Firstly it giving values to their employees that is morality and in providing good working conditions

It providing customers goods in better quality at lower price compared to competitors operating in same industry

I Following corporate social responsibility policies and it not causing any harm to society

It taking feedback from customers and producing products in their interest

Providing value to investors and to their opinions

Thank you hope my opinion will give you some extent of knowledge

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