In Financing a National Subsidiary, a Parent Company Issues Shares

question 93

Multiple Choice

In financing a national subsidiary, a parent company issues shares held by itself, the regional headquarters and other corporate entities. This form of financing is:

• A) Debt options using external financing
• B) Equity options using external financing
• C) Equity options using internal financing
• D) Debt options using internal financing

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Definitions:

Debt

Money owed by one party, the borrower, to another, the lender; typically involving repayment terms and sometimes interest.

Written Contract

An agreement between parties that is documented in a written form and signed by the parties involved.

Remedy

A legal means of enforcing a right or correcting a wrong.

Promissory Estoppel

A legal principle that prevents a party from withdrawing a promise made to a second party if the latter has reasonably relied on that promise to their detriment.