A Coase solution to a problem of externality ensures that a socially efficient outcome is to internalize the externality through taxes. internalize the externality through subsidies. maximize the joint welfare, irrespective of the right of ownership. stop production if there is any externality. invite other private partners to share the burden of externality.

Evan company reports net income of $232,000 each year and declares an annual cash dividend of $100,000. the company holds net assets of $2,130,000 on january 1, 2017. on that date, shalina purchases 40 percent of evan's outstanding common stock for $1,066,000, which gives it the ability to significantly influence evan. at the purchase date, the excess of shalina’s cost over its proportionate share of evan’s book value was assigned to goodwill. on december 31, 2019, what is the investment in evan company balance (equity method) in shalina’s financial records?