All of the Following Are Disadvantages of Holding Companies EXCEPT

question 40

Multiple Choice

All of the following are disadvantages of holding companies EXCEPT

• A) increased risk.
• B) double taxation.
• C) high cost of administration.
• D) legal responsibility for subsidiaries.

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Definitions:

Time Period Assumption

The accounting principle that allows the life of a company to be divided into time periods, such as months or years, for reporting purposes.

Company Life

A conceptual term generally referring to the length of time a company has been in business or is expected to operate.

Dodd-Frank Act

A comprehensive and complex piece of financial regulation in the United States, enacted in 2010 to prevent the recurrence of financial crises.

Clawback

A provision under which money already paid must be returned, often used in employment contracts for the return of bonuses or in investment agreements.