The Motivation of a Parent Company to Purchase the Outstanding

question 37

Multiple Choice

The motivation of a parent company to purchase the outstanding bonds of a subsidiary could be to:

• A)​replace the existing debt with new debt at a lower interest rate.
• B)​reduce the parent company's acquisition price for the subsidiary.
• C)​increase the parent company's ownership percentage in the subsidiary.
• D)​create interest revenue to offset interest expense in future income statements.

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Definitions:

Toxic Substance

A toxic substance is a chemical or compound that can cause harm to humans, animals, or the environment when ingested, inhaled, or comes in contact with skin.

Imminent Hazard

A situation that poses an immediate and significant risk to health, safety, or the environment.

Radioactive Materials

Substances that emit radiation as a result of the decay of their atomic nuclei.

Radiation Sickness

Illness and symptoms resulting from excessive exposure to ionizing radiation, affecting the body's cells and potentially leading to severe health issues.