The primary advantage of a holding company, that permit(s) the firm to control a large amount ofassets with a relatively small dollar investment is known as
A) tax effects.
B) risk protection.
C) the leverage effect.
D) administrative costs.

Question

Quizplus · Accepted Answer

The leverage effect is the primary advantage of a holding company, as it allows the firm to control a large amount of assets with a relatively small dollar investment. This is achieved by using debt financing to acquire subsidiaries and maintain control over them, which can increase the return on investment for the holding company.

The Primary Advantage of a Holding Company, That Permit(s) the Firm