A Parent Corporation Will Be Liable to Creditors of a Subsidiary

question 45

Multiple Choice

A parent corporation will be liable to creditors of a subsidiary corporation

• A)only if the parent corporation and the subsidiary corporation have exactly the same directors.
• B)only if the subsidiary corporation is a private (non-distributing)corporation.
• C)only if the parent corporation owns more than 50 percent of the shares in the subsidiary corporation.
• D)only if the parent corporation owns 100 percent of the shares in the subsidiary corporation.
• E)none of the above

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Definitions:

Present Value

The immediate monetary value of a future sum of money or cash flow sequences, utilizing a known rate of return for calculation.

Excel

A spreadsheet program created by Microsoft that allows users to organize, format, and calculate data with formulas using a system of cells arranged in rows and columns.

Calculation

The process of determining a result numerically, often involving mathematical operations and formulas.

Present Value Factor

A multiplier used to determine the present value of a future cash flow, considering the time value of money.