Where parent decides to combine with subsidiary

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Reference no: EM131202403

In a situation where a parent decides to combine with a subsidiary, which of the following statements is correct?

If the parent owns 90% or more of any class of capital stock of the subsidiary, it is possible to combine the companies using either ITA 87 or ITA 88(1).

If the parent owns 90% or more of any class of capital stock of the subsidiary, it will be able to take advantage of a bump up in asset values, regardless of the approach taken to complete the transaction.

If the parent owns 90% or more of the shares of each class of capital stock of the subsidiary, it will be able to take advantage of a bump up in asset values, regardless of the approach taken to complete the transaction.

If the parent owns 90% or more of the shares of each class of capital stock of the subsidiary, it is possible to combine the companies using either ITA 87 or ITA 88(1).

Reference no: EM131202403

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