Asked by Ismael Trujillo on Jun 18, 2024
Verified
Parent Ltd owns 20% of S1 Ltd and 80% of S2 Ltd.In addition,S2 Ltd owns 70% of S1 Ltd.The total NCI in S1 Ltd is:
A) 10%.
B) 14%.
C) 24%.
D) none of the above.
Total NCI
Refers to the Total Non-Controlling Interest in a company, representing the equity in a subsidiary not attributable directly or indirectly to the parent company.
Parent Ltd
A corporation that holds a controlling interest in one or more other companies, also referred to as subsidiaries.
- Learn about the concept of non-controlling interest (NCI) and the technique for its calculation.
Verified Answer
BR
Bailey RatliffJun 21, 2024
Final Answer :
C
Explanation :
Parent Ltd directly owns 20% of S1 Ltd, and through S2 Ltd (which it owns 80% of), it indirectly owns 56% of S1 Ltd (80% of S2 Ltd's 70% ownership in S1 Ltd). Therefore, Parent Ltd's total effective ownership in S1 Ltd is 76% (20% direct + 56% indirect), leaving a 24% non-controlling interest (NCI).
Learning Objectives
- Learn about the concept of non-controlling interest (NCI) and the technique for its calculation.