Townsend Ltd. Has the Following Shareholders: Palermo Co.-60

Townsend Ltd. has the following shareholders: Palermo Co.-60%
Nix Ltd.-30%
Riley Ltd.-10%
Nix does not conduct any business with Townsend; nor has it been able to secure a seat on the board of directors. Which of the following statements is true?

A) Nix has significant influence over Townsend.
B) Nix should consider Townsend to be a special purpose entity.
C) Nix should consider Townsend to be an associated company.
D) Nix should treat Townsend as a non-strategic investment.

Correct Answer:

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