Sports spectaculars net income under the equity method

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Sports Spectacular purchased 1,200 shares of stock in The Athletic Warehouse for $40 per share. The investment is properly recorded using the equity method. By the end of the year, the stock price has increased to $42 per share. How would the change in stock price affect Sports Spectacular’s net income under the equity method?

Increase net income by $50,400.

No effect.

Increase net income by $2,400.

Increase net income by $48,000

Reference no: EM13825337

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