What term describes a company whose voting stock is more than 50% owned by another company?

What term describes a company whose voting stock is more than 50% owned by another company?

• A. Affiliate
• B. Subsidiary
• C. Joint venture
• D. Parent company

Answer: (B)

When one company owns more than half of another company's voting stock, it gains control over that company. The company that is majority-owned is called a subsidiary, and the owning company is the parent. This relationship means the parent can influence or direct the subsidiary’s policies and operations, including board appointments and major strategic decisions. The other terms don’t fit this specific scenario: an affiliate is a related but not controlled entity; a joint venture is a separate enterprise created by two or more parties; the parent company is the owning entity, not the one being owned.

When one company owns more than half of another company's voting stock, it gains control over that company. The company that is majority-owned is called a subsidiary, and the owning company is the parent. This relationship means the parent can influence or direct the subsidiary’s policies and operations, including board appointments and major strategic decisions. The other terms don’t fit this specific scenario: an affiliate is a related but not controlled entity; a joint venture is a separate enterprise created by two or more parties; the parent company is the owning entity, not the one being owned.