Rather Than Acquire an Existing Textile Manufacturer in Jakarta, FauxFabric

question 44

Multiple Choice

Rather than acquire an existing textile manufacturer in Jakarta, FauxFabric Inc. chose to establish new operations in Indonesia. This form of FDI is called

• A) consolidation.
• B) a greenfield investment.
• C) an acquisition.
• D) a licensing agreement.
• E) mass customization.

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Definitions:

Acquisition

The method where one corporation acquires the majority or entirety of another corporation's shares to obtain dominance over that corporation.

Fair Value

A financial accounting term used to describe the estimated market value of an asset or liability based on current market conditions.

Noncontrolling Interest

A stake in a company owned by minority shareholders that doesn’t give them control over the company's operational and financial decisions.

Noncontrolling Interest

A minority share in a subsidiary that is not enough to exert control, often reflected in the parent company's financial statements as part of equity but separate from the parent's equity.