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Bookmark or Share- Parent Company Definition & Example - InvestingAnswersSometimes, a parent company will create subsidiaries for tax and liability purposes, creating separate entities with legal and financial shields to protect it the parent company from recourse or liability. However, tax and legal treatment of parent companies differs among countries and should be understood and considered.
- Guarantor Definition & Example - InvestingAnswersOften a parent company will offer a financial guarantee of bonds issued by one of the parent's subsidiaries, but there are plenty of other situations that might involve guarantees. For example, vendors sometimes require customers to become guarantors if the vendor is uncertain about the customer's ability to pay (this most often happens in ...
- Consolidated Financial Statements | Examples & DefinitionA consolidated financial statement is the combined financial statements of a parent company and all of its subsidiaries, divisions, and/or sub-organizations. Consolidated financial statements provide a comprehensive overview of a company's financial operations for the entire group of entities.
- Agency Cost | Examples & Meaning - InvestingAnswersThese expenses not only increase a company’s operating cost, but they also don’t provide any value to shareholders. To keep their interests top priority, shareholders may offer the following examples of agency costs such as: paying bonuses to management if/when share prices increase; making management’s salaries partial shares in the company.
- Wholly Owned Subsidiary Definition & Example - InvestingAnswersWholly owned subsidiaries enable holding companies (i.e. the parent company) to maintain operations in diverse geographic areas, market areas, and even entirely separate industries, creating an important hedge against changes in the market, geopolitical and trade practice changes, and declines in industry sectors.
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