If a parent company has two wholly owned subsidiaries how many legal and economic entities are there from the viewpoint of the shareholders of the parent company? $\begin{array}{ll}\underline{\text{ Legal }}& \underline{\text{ Economic }}\end{array}$
A) $\begin{array}{llccc}3& & & & 3\end{array}$
B) $\begin{array}{llccc}1& & & & 2\end{array}$
C) $\begin{array}{llccc}3& & & & 1\end{array}$
D) $\begin{array}{llccc}2& & & & 1\end{array}$

Legal Entities

Organizations or structures that are recognized by law as having rights and responsibilities, such as corporations, partnerships, and sole proprietorships.

Economic Entities

Organizations or units that engage in economic activities, recognized as separate from their owners.

Wholly Owned Subsidiaries

Companies whose entire share capital is 100% owned by another company, the parent company.