Which of the Following Is Not a Reason Why a Parent

question 21

Multiple Choice

Which of the following is not a reason why a parent company would prefer to be involved with an NCI?

• A)Reduction on ownership risk
• B)Potential for increased share dilution
• C)Maintenance of a market for the subsidiary's shares
• D)Potential links to resources such as government support and management expertise

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Definitions:

Consolidated Balance Sheet

A financial statement showing the combined financial position of a parent company and its subsidiaries, presenting the assets, liabilities, and equity as if the group were a single entity.

Disclosure Requirements

Guidelines or regulations that mandate the information companies must provide to stakeholders, ensuring transparency and assisting in informed decision-making.

Non-Controlling Interest

The share of ownership in a subsidiary that cannot be directly or indirectly ascribed to the parent company.

Long Term Investments

Investments not expected to be sold or converted into cash within the next year, including stocks, bonds, and real estate.