Banks can have a complex bank holding structure with numerous subsidiaries. First, the subsidiary needs to be an operating company doing real business transactions as opposed to a shell company with the sole purpose of funneling cash flows and/or holding ownership in a firm that is part of the holding company structure.
The 2 diversification measures are beta risk for investor purposes and operating cash flow correlation for reduction in company-specific risk. References to provide formulas are:
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Use financial plan with cost (profit) centers and compare revenues and costs. The question is how to set up transfer prices releated to services and equipment from headquarters.