While Not Always True for Small Firms, Large Multinationals Can

question 6

Multiple Choice

While not always true for small firms, large multinationals can deal with currency fluctuations by

• A) using forward contracts and foreign-currency options.
• B) locating all their plants in the country that offers the most advantageous exchange position.
• C) limiting sales in each country market to reduce exposure to any one currency.
• D) following the advice of the international sales manager.

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Definitions:

Fully Participating

Refers to a type of preferred stock or other securities that entitle holders to receive additional dividends beyond a specified amount if certain conditions are met.

Stock Dividend

A stock dividend is a dividend payment made in the form of additional shares rather than a cash payout, increasing the number of shares owned while diluting the value of each share.

Market Price

The current price at which an asset or service can be bought or sold in the marketplace.

Retained Earnings

The portion of a business's profits that are kept within the company rather than distributed to shareholders as dividends.