C Co Currently Owns 80% of D Co

question 60

Essay

C Co. currently owns 80% of D Co. and several other subsidiaries. C Co. is interested in gaining control of H Co. Why might C Co. allow D Co. to acquire H Co., rather than purchasing H Co. directly?

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Definitions:

Standard Deviation

A statistical measure of the dispersion or variability in a dataset, often used in finance to quantify the risk of investment.

Very Risky Stocks

Shares of companies with a high level of volatility and uncertainty, often associated with the potential for both high returns and significant losses.

Risk Averse

Characteristic of an investor or decision-maker who prefers to avoid risk, often choosing investments with lower potential returns to minimize the chance of loss.

Portfolios

Collections of financial assets such as stocks, bonds, commodities, and cash, held by an investment company, hedge fund, financial institution, or individual.