To determine the effective ownership that the parent company has in Hinds Ltd through its subsidiary Lev Ltd, we need to calculate the indirect ownership stake.
The parent undertaking owns 60% of Lev Ltd. Then Lev Ltd owns 40% of Hinds Ltd. The effective ownership of the parent company in Hinds Ltd can be computed by multiplying these percentages:
Effective ownership of Hinds Ltd by the parent company = 60% of Lev Ltd * 40% of Hinds Ltd
= 0.60 * 0.40
= 0.24
= 24%
So, through Lev Ltd, the parent undertaking effectively owns 24% of Hinds Ltd.
If the parent undertaking owns 60% of subsidiary Lev Ltd and Lev Ltd owns 40% of another subsidiary Hinds Ltd. What percentage of Hinds Ltd is owned by the parent company?
1 answer
1 answer