WHEN A PARENT COMPANY IS WILLING TO LET ITS SUBSIDIARY DEFAULT, A....

4. When a parent company is willing to let its subsidiary default, a. Creditors and potential creditors will examine the subsidiary’s financial structure closely to assess default risk. b. Potential creditors will still look to the parent company’s capital structure as it is still legally and morally responsible for its subsidiary’s debts. c. It is incumbent upon the subsidiary to take on as much debt as possible, pay a dividend to the parent and then default. d. None of the above.