One of the principal risks with wholly owned subsidiaries is:
A)that they bring together the complementary skills of alliances partners.
B)to give control of a firm's technology to its partner.
C)a firm must bear the full capital costs and risks of setting up overseas operations.
D)that they allow firms to share fixed costs.

Question

Quizplus · Accepted Answer

Wholly owned subsidiaries require a significant investment in capital to establish operations in a foreign country, and the parent company is solely responsible for bearing the risks and financial costs. This can result in significant financial risks for the parent company.

One of the Principal Risks with Wholly Owned Subsidiaries Is