Question: Winthrop Enterprises is a holding company a firm that owns
Winthrop Enterprises is a holding company (a firm that owns all or most of some other companies’ outstanding stock). Winthrop has four subsidiaries. Each subsidiary borrows capital from the parent company for projects. Ervin Company is successful with its projects 85% of the time, Morten Company 92% of the time, Richmond Company 78% of the time, and Garfield Company 83% of the time. What loan rates should Winthrop Enterprises charge each subsidiary for loans?
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