A owns 80% of B and B owns 60% of C.If C pays a dividend and B distributes the amount received to its own shareholders,the allocation of the dividend will be:
A) parent 48%, NCI 52%.
B) parent 52%, NCI 48%.
C) parent 100%.
D) NCI 100%.

Question

Quizplus · Accepted Answer

Since A owns 80% of B, A's share in the dividend paid by C through B will be 80% x 60% = 48%. The remaining 52% will be allocated to the Non-Controlling Interest (NCI) who owns the remaining 20% of B. Therefore, the dividend allocation will be parent 48%, NCI 52%.

A Owns 80% of B and B Owns 60% of C.If