Which of the Following Is Not an Advantage of the Parent

question 7

Multiple Choice

Which of the following is not an advantage of the parent issuing shares of stock in exchange for the subsidiary common shares being acquired?

• A)​It is not necessary to determine the fair values of the subsidiary's net assets.
• B)​It may allow the subsidiary's shareholders to have a tax free exchange.
• C)​It avoids the depletion of cash.
• D)​If the parent is publicly held, the share price is readily determinable.

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Definitions:

Policy Preferences

are the specific policies or policy directions favored by individuals, groups, or political entities.

Proposal Decisions

The outcomes or determinations made regarding proposals or suggestions presented for consideration or action.

Not-for-profit Agencies

Organizations that operate for purposes other than generating profit, focusing instead on serving a public or social cause.

Fiscal Considerations

Financial factors that are taken into account in the planning and management of resources, often within a government or organization.