The Sale of a Subsidiary by an MNC Is Referred

question 21

True/False

The sale of a subsidiary by an MNC is referred to as a divestiture.

Understand the concept of efficiency in the context of production and marginal analysis

Identify the relationship and differences between short-run and long-run decision-making for firms

Determine how output decisions are influenced by cost curves and market price

Describe the role of marginal analysis in profit maximization and loss minimization

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Definitions:

Equity Method

An accounting technique used by companies to record their investments in other companies, where the investment is recorded at original cost and adjusted for the investor's share of the investee's net income or loss.

Voting Shares

Shares of a company's stock that grant the shareholder the right to vote on corporate matters and decisions at shareholder meetings.

Issue of Shares

The process by which a company allocates new shares to shareholders, which can raise capital or dilute ownership depending on the circumstances.

Gain or Loss

The financial result from the sale of an asset or investment, calculated as the difference between the selling price and the original purchase price.