Question

Leodan, a glass manufacturing firm based in the U.S., has sole control over several glass manufacturing facilities located all over the world. The company assumes the entire risk if any of the facilities undergoes losses, and it enjoys all the profits if the facilities do well. Which of the following methods has Leodan used to conduct business globally in this scenario?A) The formation of a joint ventureB) The establishment of a strategic allianceC) The formation of wholly owned affiliatesD) The establishment of a cooperative contract

Answer 1

Answer: C) The formation of wholly owned affiliates

Step-by-step explanation:

A wholly owned affiliates -

It refers to a company which is fully owned by another company is referred to as the wholly owned affiliates .

The company having the subsidiary is known as the parent or the holding company , the parent company has all the stock of the subsidiary .

The method is used in order to save the company from any huge loss in the market .

Hence , from the given scenario of the question ,

The correct answer is the formation of wholly owned affiliates .