Question

Adieu Enterprises, based in Toronto, decides to expand into the South American market. To do so, it establishes a separate operation in Brazil that is owned and controlled in its entirety by Adieu. What form of expanding internationally does this represent?

Answer 1

Answer:

The correct answer is: Wholly-owned subsidiary.

Explanation:

A Wholly-owned subsidiary is a company whose common stock is 100% owned by another company. When a company owns less than 50% of another company it holds a minority interest in that company. With a wholly owned subsidiary, the parent company can control all production, management, and profits but it also shares costs and responsibilities.