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Jacqueline Winston
on Oct 16, 2024

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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

Ownership Risk

The risk of loss in value or return on investment due to changes in ownership structure or disputes over property rights.

Share Dilution

A reduction in existing shareholders' ownership percentage caused by the issuance of new shares.

Government Support

Financial or non-financial aid provided by the government to businesses, industries, or individuals in forms such as grants, loans, or tax incentives.

  • Distinguish the motives for securing less than a 100% stake in a subsidiary.
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Michael MacalusoOct 23, 2024
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