The investee company in a long-term investment with controlling interest is called the:Multiple ChoiceOwner.Subsidiary.Parent.Creditor.Senior entity.
Question
The investee company in a long-term investment with controlling interest is called the:
- Owner.
- Subsidiary.
- Parent.
- Creditor.
- Senior entity.
Solution
Step 1: Break Down the Problem
To solve the question, we need to identify the correct term used to describe a company in which another company has a controlling interest in a long-term investment.
Step 2: Relevant Concepts
- Owner: A general term that can refer to anyone who owns a part of a company.
- Subsidiary: A company that is controlled by another company (the parent company).
- Parent: The company that holds controlling interest in another company (the subsidiary).
- Creditor: A party that lends money or extends credit.
- Senior entity: A term that often refers to a higher-ranking organization but doesn't specifically apply to ownership/control.
Step 3: Analysis and Detail
The key terms here are "long-term investment" and "controlling interest." In corporate structures:
- A subsidiary is a company that is controlled by another company.
- A parent company is the one that owns enough voting stock or shares in another company to control its decisions.
Step 4: Verify and Summarize
The question asks for the term that means the company that has a controlling interest. Since the term "parent" is specifically used in corporate contexts to denote the owner of a subsidiary, it best fits the definition being asked.
Final Answer
The correct answer is Parent.
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