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NEW QUESTION: 1
Business combinations are accomplished either through a direct acquisition of assets and liabilities by a surviving corporation or by stock investments in one or more companies.
A parent-subsidiary relationship always arises from a
A. Greater than 50% stock investment in another entity.
B. Vertical combination.
C. Horizontal combination.
D. Tax-free reorganization.
A parent-subsidiary relationship arises from an effective investment in the stock of another enterprise in the stock of 50%. The financial statements for the two companies ordinarily should be presented on a consolidated basis. To the extent the corporation is not wholly-owned, a noncontrolling interest is presented.
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