A key consideration in the holding company decision is
A. the risk-return tradeoff due to the leverage effect.
B. the greater “distance” between top level and operating management.
C. the risk of the domino effect if one company in the holding company fails.
D. the risk from the separate “companies” in the holding company being classed as one company.
Answer:A
A key consideration in the holding company decision is
A. the risk-return tradeoff due to the leverage effect. B. the greater “distance” between top level and operating management. C. the risk of the domino effect if one company in the holding company fails. D. the risk from the separate “companies” in the holding company being classed as one company.