Which of the following is an advantage of wholly owned subsidiaries?
A) The parent company receives all profits generated by the subsidiary.
B) They are the least expensive investment entry modes.
C) They help in the sharing of the cost of an international investment project.
D) They are the least risky when compared to other investment entry modes.

Question

Quizplus · Accepted Answer

The advantage of wholly owned subsidiaries is that the parent company receives all profits generated by the subsidiary, making it a more financially lucrative investment. Option B is incorrect because wholly owned subsidiaries are usually the most expensive investment entry modes due to the high cost of establishing and running them. Option C is incorrect because wholly owned subsidiaries do not help in the sharing of costs; instead, the parent company bears all the costs. Option D is incorrect because wholly owned subsidiaries are usually the riskiest investment entry modes due to the high levels of control and investment involved.

Which of the Following Is an Advantage of Wholly Owned