The advantage of a holding company:
A) is that it seems to afford opportunities for leverage.
B) is that it always prevents foreign acquisition.
C) is the avoidance of competition laws.
D) is that it magnifies poor returns.

Question

Quizplus · Accepted Answer

The advantage of a holding company is that it seems to afford opportunities for leverage, meaning that it can use debt financing to increase its returns. This can be beneficial for the company and its shareholders. The other options listed (preventing foreign acquisition, avoidance of competition laws, and magnifying poor returns) are not necessarily advantages of a holding company.

The Advantage of a Holding Company