A controlling interest in a company implies that the parent company
A)owns all of the subsidiary's stock.
B)has acquired a majority of the subsidiary's common stock.
C)has paid cash for a majority of the subsidiary's stock.
D)has transferred common stock for a majority of the subsidiary's outstanding bonds and debentures.

Question

A controlling interest in a company implies that the parent company​
A)​owns all of the subsidiary's stock.
B)​has acquired a majority of the subsidiary's common stock.
C)​has paid cash for a majority of the subsidiary's stock.
D)​has transferred common stock for a majority of the subsidiary's outstanding bonds and debentures.

Quizplus · Accepted Answer

A controlling interest in a company means that the parent company has acquired a majority of the subsidiary's common stock, which gives it the power to make important business decisions and control the subsidiary's operations. Owning all of the subsidiary's stock (Choice A) is not necessary for control, as owning a majority is usually enough. Paying cash for a majority of stock (Choice C) is one way to acquire a controlling interest, but it is not the only way. Transferring common stock for a majority of outstanding bonds and debentures (Choice D) is not related to acquiring a controlling interest.

A Controlling Interest in a Company Implies That the Parent