Question

Before promoting a subsidiary, what financial test best protects members’ interests?

• A. Reviewing the subsidiary's past dividend payout ratio.
• B. Examining the subsidiary's current liquidity ratios.
• C. Stress-testing the business plan against downside scenarios
• D. Analyzing the subsidiary's projected profit margins in a stable market.

Answer 1

Answer:

C. Stress-testing the business plan against downside scenarios

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