Which of the following is not a reason for a parent to lose control of a subsidiary?
A) Where the subsidiary issues additional shares to parties other than the parent
B) Where the subsidiary issues bonus shares on a pro-rata basis.
C) When the parent makes a decision to sell its controlling interest in the subsidiary to another party.
D) Where the subsidiary issues additional shares to parties other than the parent.
E) The subsidiary becoming subject to the control of a government regulator.

Question

Quizplus · Accepted Answer

Issuing bonus shares on a pro-rata basis does not affect the parent's control of the subsidiary, as the parent will still maintain the same percentage of ownership. All other options (A, C, D, and E) could potentially result in a loss of control by the parent.

Which of the Following Is Not a Reason for a Parent