In a Situation Where a Parent Acquires Shares in a Subsidiary

question 39

Multiple Choice

In a situation where a parent acquires shares in a subsidiary, and the subsidiary later acquires a controlling interest in another entity, the ownership structure is:

• A) sequential.
• B) non-sequential.
• C) ordered.
• D) random.

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Definitions:

Internal Rate

Often refers to the internal rate of return (IRR), which is a discount rate that makes the net present value of all cash flows from a particular project equal to zero.

Return

The amount of profit or loss gained from an investment relative to its initial cost.

Project A

Not a definitive key term without additional context; it likely refers to a specific, named project within a given context. NO.

Net Present Value

The gap between how much cash comes in and goes out, measured in present value terms, during a certain period.