BPM Corp. is a manufacturer of radar systems for regional-sized jet aircraft. The company has announced plans to enter into a joint venture with J3 Composites, a producer of advanced composite materials. The announced venture will produce a new, combined product consisting of the radar unit and protective composite cover. Which of the following ownership arrangements would be most typical for a joint venture?
A) BPM will own more than 50 percent of the venture and a new company will be formed.
B) J3 will own more than 50 percent of the venture and a new company will be formed.
C) BPM and J3 will both own 50 percent of the venture and a new company will be formed.
D) BPM and J3 will both own 50 percent of the venture but no new company will be formed.

Question

Quizplus · Accepted Answer

A joint venture typically involves two or more companies coming together to form a new entity, in which each party has an equal ownership stake. Therefore, BPM and J3 will both own 50 percent of the venture and a new company will be formed to produce the new, combined product.

BPM Corp Is a Manufacturer of Radar Systems for Regional-Sized Jet