Fact Pattern 31-4 Carrier Company exchanges some of its shares for some of the shares of Distribution Corporation. The exchange is used to create Equity Inc., whose business activity is to hold the shares of the two companies.
Refer to Fact Pattern 31-4. Equity Inc. is
A) a holding company.
B) a parent corporation.
C) a subsidiary corporation.
D) a foreign corporation.

Question

Quizplus · Accepted Answer

Equity Inc. is a holding company because its primary business activity is to hold the shares of Carrier Company and Distribution Corporation.

Fact Pattern 31-4 Carrier Company Exchanges Some of Its Shares