A Company That Owns More Than 50% of the Common

question 64

Multiple Choice

A company that owns more than 50% of the common stock of another company is known as the

• A) charge company.
• B) subsidiary company.
• C) parent company.
• D) management company.

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Definitions:

Convertible Bond

A bond that can be converted into a specified number of shares of stock at the owner’s discretion.

Conversion Price

The predetermined price at which convertible securities can be converted into common stock.

Conversion Ratio

A ratio set at the time bonds are issued; determines the number of shares that can be exchanged for a bond.

Bond Rating

An evaluation made by credit rating agencies regarding the credit worthiness of a corporation's or government's debt issues, reflecting the likelihood of default.