Acquisitions Increase the Risk Associated with Entering New Markets

question 155

True/False

Acquisitions increase the risk associated with entering new markets.

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Definitions:

Current Operations

Activities related to the primary business objectives that generate revenue within the current fiscal period.

Controlling Influence

The power to govern the financial and operating policies of an entity to benefit from its activities.

Parent

In the context of business, a parent company is one that owns enough voting stock in another corporation to control its board of directors and therefore its operations and policies.

Subsidiary

A company controlled by another company, known as the parent company, through the ownership of more than half of its voting stock.