Which of the following situations is viewed as the parent having treasury stock?
A)A owns 80% of B, and B owns 70% of C.
B)A owns 80% of B and 20% of C; B owns 70% of C.
C)A owns 80% of B, and B owns 20% of A.
D)None of the above.

Question

Which of the following situations is viewed as the parent having treasury stock?
A)​A owns 80% of B, and B owns 70% of C.
B)​A owns 80% of B and 20% of C; B owns 70% of C.
C)​A owns 80% of B, and B owns 20% of A.
D)​None of the above.

Quizplus · Accepted Answer

Treasury stock refers to shares that were issued and later reacquired by the issuing company. In the context of parent and subsidiary relationships, a situation resembling treasury stock occurs when a parent company owns a subsidiary, and that subsidiary owns shares in the parent company. Choice C describes such a scenario, where A owns 80% of B, and B owns 20% of A, effectively making B's ownership in A akin to A holding its own stock, similar to treasury stock.

Which of the Following Situations Is Viewed as the Parent