Which of the following represents an advantage for holding companies?
A) They are easy to analyze for investment purposes.
B) They are facilitated with reduced federal corporate taxes due to the holding company status.
C) They are exempted from double taxation.
D) They permit a firm to control a large amount of assets with relatively small dollar investment.

Question

Quizplus · Accepted Answer

Holding companies allow a firm to control a large amount of assets with relatively small dollar investment. Holding companies are formed mainly to hold the shares of other companies, so they do not provide goods or services themselves, exempting them from double taxation. However, they do not receive reduced federal corporate taxes due to their holding company status. They can be complex and difficult to analyze for investment purposes.

Which of the Following Represents an Advantage for Holding Companies