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- March 18, 2023 at 12:02 pm #681490Safiya.12345Participant
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8 Germane has a number of relationships with other companies.
In which of the following relationships is Germane necessarily the parent?
(i) Foll has 50,000 non?voting and 100,000 voting equity shares in issue with each share
receiving the same dividend. Germane owns all of Foll’s non?voting shares and 40,000
of its voting shares.
(ii) Kipp has 1 million equity shares in issue of which Germane owns 40%. Germane also
owns $800,000 out of $1 million 8% convertible loan notes issued by Kipp. These loan
notes may be converted on the basis of 40 equity shares for each $100 of loan note,
or they may be redeemed in cash at the option of the holder.
(iii) Germane owns 49% of the equity shares in Polly and 52% of its non?redeemable
preference shares. As a result of these investments, Germane receives variable returns
from Polly and has the ability to affect these returns through its power over Polly.
A (i) only
B (i) and (ii) only
C (ii) and (iii) only
D All three
ans is c
Can you please explain why the second option is subsidiary and how ?
you feedback will be helpful
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