Investing less in equity by the parent would affect the profitability of the investment because when the parent company is not investing higher amount in the investment, then it is subject to significant control by other parties and when there will be a significant influence by the other parties, then there will be a lack of the autonomy on the project the fraction and it would be leading into a lower profitability because other parties will also try to act for their own interest and hence investing lower in equity by the parent will be affecting the overall profitability of the Investments.

The profitability of the investments are directly dependent upon the degree of control by the parent because when there will be other party who are trying to influence the direction of the project then there will be a significance control which will be exercised but this party is on the project also and hence they will also influence the rate of return to certain extent for their own advantage and hence it will mean that the overall profitability of the project can go lower if the parents are not having the adequate control and they are not able to maximize the investment to maximum extent due to inadequate control and there will be influenced by other parties.