If a Parent Company Has Controlling Interest in a Subsidiary

question 31

Multiple Choice

If a parent company has controlling interest in a subsidiary which has no potentially dilutive securities outstanding,then in the calculation of consolidated diluted EPS,it will be necessary to

• A)only make an adjustment of subsidiary's basic earnings.
• B)replace the parent's equity in subsidiary earnings with the parent's equity in subsidiary's diluted EPS.
• C)make a replacement calculation in the parent's basic earnings for the EPS.
• D)only use the parent's common shares and shares represented by the parent's potentially dilutive securities.

Identify the shutdown point and its implications for firm decision-making.

Calculate operating profits and economic profits for a firm.

Determine the short-run operating conditions for a firm, including whether to operate, shut down, or go out of business.

Recognize the relationship between market price and firm's production decisions.

---

Definitions:

Grand Juries

A group of citizens convened to decide whether there is sufficient evidence to indict a suspect and proceed to trial.

Criminal Prosecutions

The process of charging someone with a crime and conducting a trial to determine guilt or innocence, typically led by a government prosecutor.

Right to Privacy

A legal principle that protects an individual's personal information and freedom from unwarranted intrusion by governments, organizations, and other individuals.

Birth Control

Methods or devices used to prevent pregnancy as part of family planning.