Important Advantages of a Holding Company Structure Include

question 5

Multiple Choice

Important advantages of a holding company structure include

• A) savings in personnel and overhead expenses associated with a small corporate office.
• B) a high level of awareness at the corporate office of issues faced by individual divisions.
• C) a high level of control of division executives by executives at the corporate level.
• D) gaining synergistic benefits across businesses.

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Definitions:

Negative Covenant

A clause in a contract that prohibits a borrower from taking certain actions, intended to protect the interests of the lender by maintaining the borrower's financial stability.

Current Ratio

A financial ratio indicating the capacity of a firm to cover its short-term liabilities with its current assets.

Loan Collateral

Assets a borrower offers to a lender as security for a loan, which can be seized if the loan is not repaid.

Coupon Rate

The annual interest rate paid by a bond expressed as a percentage of the face value.