How is control determined when a parent company does not own a majority of the voting stock of a subsidiary?

Question

Quizplus · Accepted Answer

When a parent company does not own a majority of the voting stock of a subsidiary, control can be determined through various criteria. Effective control can be established through the control of senior management or board of directors, controlling the subsidiary's operating, investing, or financing activities and the right to obtain control by buying more shares after a triggering event. Therefore, option D is the best choice. Options A, B, and C are all potential ways that a parent company can exert varying levels of influence over a subsidiary's activities, but they do not necessarily determine control in the absence of a majority voting stock.

How Is Control Determined When a Parent Company Does Not