Assume That an MNC Has a Subsidiary in Italy, Which

question 54

True/False

Assume that an MNC has a subsidiary in Italy, which exports its products to various countries in Europe. Since all of the countries where it exports use the euro as their currency, this MNC is not subject to exchange rate risk.

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Definitions:

Liabilities

Financial obligations or debts that a company owes to others, reflecting amounts that must be paid in the future.

Authorized Shares

The maximum number of shares a corporation is legally allowed to issue, as stipulated in its articles of incorporation.

Treasury Stock

Shares that were issued and later reacquired by the issuing company, reducing the amount of outstanding stock on the open market.

Cash Dividend

A share of a company's profits paid out to its shareholders in cash.