All of the following are advantages of holding companies EXCEPT
A) reduced federal corporate taxes due to the holding company status.
B) possible provincial tax benefits realized by each subsidiary in its state of incorporation.
C) lawsuits or legal actions against a subsidiary will not threaten the remaining companies.
D) since each subsidiary is a separate corporation, the failure of one company should cost the holding company no more than its investment in that subsidiary.

Question

Quizplus · Accepted Answer

Holding companies do not necessarily result in reduced federal corporate taxes. The tax benefits realized by each subsidiary in its state of incorporation and the reduction in liability for the holding company are advantages of holding companies. The failure of one company should not cost the holding company more than its investment in that subsidiary is another advantage of holding companies.

All of the Following Are Advantages of Holding Companies EXCEPT