A subsidiary may decide to issue more of its common stock to raise capital. Sometimes this reduces the Parent's share of its investment.

My question to you is, why do think the Parent would allow the subsidiary to issue more stock, reducing the value of its investment? Is it possible, the Parent slowly wants to divest its interest? What are some reasons why this could happen? Please explain your answers.

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Divestment is the process of selling a companys subsidiary assets investments or divisions in order ... View the full answer