A Company owns 80% of the voting shares of B Company,which in turn owns 70% of the shares of C Company.There are no outstanding warrants or options which would enable holders of other instruments to acquire additional voting shares of any of these companies.In this scenario,
A)A has no control over C because it does not own any shares of C Company.
B)A has direct control over C.
C)A has indirect control over C.
D)control cannot be determined from the information given.

Question

Quizplus · Accepted Answer

A has indirect control over C because it owns 80% of B, which in turn owns 70% of C. Therefore, A indirectly owns 56% (80% x 70%) of C's voting shares, which gives it the power to control C's decisions.

A Company Owns 80% of the Voting Shares of B