An Argument for an MNC to Have a Debt-Intensive Capital

question 45

Multiple Choice

An argument for an MNC to have a debt-intensive capital structure is that:

• A) it can reduce the MNC's exposure to exchange rate risk on earnings remitted by subsidiaries to the parent.
• B) it can reduce the chance of bankruptcy.
• C) it spreads the shareholder base.
• D) it forces subsidiaries to pay dividends to shareholders.

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Definitions:

Valid Receipts

Official documents or records that acknowledge the receipt of goods, services, or payments and serve as proof of transactions.

Auxiliary Petty Cash Record

An ancillary log kept to track petty cash transactions separately from the main cash records for better management and reconciliation.

Petty Cash Voucher

A document used to log and authorize the use of petty cash funds for small, incidental expenses.

Cash Short

A situation where the recorded cash amount is less than the expected amount, often due to errors or theft.