Because minority stockholders exercise no ownership control over the operations of either the parent company or the subsidiary, minority stockholders in substance might be considered a special class of creditors of the consolidated entity.

Question

Quizplus · Accepted Answer

Minority stockholders do not have control over the operations of the parent company or the subsidiary, and their claims on the assets of the consolidated entity are subordinate to those of creditors.

Because Minority Stockholders Exercise No Ownership Control Over the Operations