I am studying investment in equity securities and am trying to make sure that I understand the cost method (my textbook has no problems with it).

Let us say I make an invest $1,000 in company A common stock, and the fair value of my investment in common stock is difficult to determine but represents 10% of outstanding shares.

1. Will this make the not determinable fair value= $10,000?

2. If dividends of $100 are offered, my basis is now $990? as dividends reduce investment when using the cost method.

3. If I invest another 20% more into company A will my increase to the investment be $10,000*.2=$2,000? as no evidence has been provided to require an adjustment of the initial fair value.

4 Even though my investment is 30%, which requires the use of the equity method. Will, I still use the cost method as I do not retain a controlling financial interest, hence no significant influence?