The two principal advantages of holding companies are (1) the holding company can control a great deal of assets with limited equity and (2) the dividends received by the parent from the subsidiary are not taxed if the parent holds at least 50% of the subsidiary's stock.

Question

Quizplus · Accepted Answer

The second advantage is incorrect; dividends received by a parent company from a subsidiary are typically subject to taxation, although there may be tax reliefs or credits available depending on the jurisdiction and specific circumstances.

The Two Principal Advantages of Holding Companies Are (1) the Holding