An MNC's "Global" Target Capital Structure Is

question 40

Multiple Choice

An MNC's "global" target capital structure is:

• A) always debt intensive.
• B) always equity intensive.
• C) sometimes different from the MNC's "local" capital structure (at a subsidiary).
• D) None of these are correct.

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Definitions:

Interest Payable

A liability account showing the amount of interest expense that has been incurred but not yet paid.

Nominal Interest Rate

The stated interest rate of an investment or loan without accounting for inflation or compounding interest effects.

Nominal Interest Rate

The stated interest rate on a loan or financial instrument, not accounting for inflation or other factors that affect the real interest rate.

Effective Interest Rate

The actual interest rate on a loan or financial product, reflecting the compounding periods per year.