explain cost of control in context of a holding company
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COST OF CONTROL Definition. COST OF CONTROL (COC) is the amount paid by a holding company, sometimes at a premium, for shares in its subsidiary company over and above the value they would command as an investment, in recognition of the particular benefit, which the company gains through control
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Cost of control in context of a holding company
Explanation:
Holding company is a company which holds stock of other company called subsidiary company. Cost of control is the surplus paid in the form of premium by the holding company to the subsidiary company. the holding company pays the surplus over the value of assets that it will own in the subsidiary company to compensate for the goodwill earned by the subsidiary firm. this will help the holding company getting the benefits of the goodwill created by the subsidiary.
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