• Each firm may open only 1 subsidiary
• Your subsidiary may only issue 300000 shares
• Your subsidiary must maintain 300000 shares. You cannot issue and repurchase subsidiary shares during the simulation.
• Contracts with your subsidiary which bankrupt, or clearly disadvantage the subsidiary for the benefit of the parent firm, will cause your subsidiary to be closed and an investigation to be conducted which may result in fines.

Notes: The parent firm owns 51% of the shares of stock in the subsidiary. This gives the parent firm control of the subsidiary. However, you must remember that the subsidiary is a firm with stockholders. In addition because of the ending merger of the subsidiary NPV and the parent firm NPV, it is in your best interest to manage your subsidiary wisely.

Ending NPV Calculation for Subsidiaries:

Subsidiary NPV x 51% = Y

Subsidiaries Number Shares/ Parents Number of Shares = Z

Y x Z = Change to Parent's NPV