When a Company Owns More Than 50% of the Ordinary

question 180

Multiple Choice

When a company owns more than 50% of the ordinary shares of another company,

• A) affiliated financial statements are prepared.
• B) consolidated financial statements are prepared.
• C) controlling financial statements are prepared.
• D) significant financial statements are prepared.

---

Definitions:

Net Social Cost

The total monetary cost of the negative externalities produced by an activity or production, minus any benefits.

Rent-Seeking Behavior

Activities aimed at increasing one's share of existing wealth without creating new wealth, often through manipulation or exploitation of the economic environment.

Profits

The financial gain realized when the revenue from selling goods or services exceeds the costs of production.

Monopolized

Refers to a market structure where a single firm or entity controls a significant portion of the market share, reducing competition.