In using Nestlé Corporation as a model, when a subsidiary is first formed, about one-half of the financing needed to acquire fixed assets comes from ____.
A) debt
B) federal funds
C) tax breaks
D) equity from the parent company

Question

Quizplus · Accepted Answer

When a subsidiary is first formed, about one-half of the financing needed to acquire fixed assets comes from equity from the parent company. This is because the parent company is usually responsible for funding and setting up the subsidiary, and they do so through investing their own equity.

In Using Nestlé Corporation as a Model, When a Subsidiary