A Risk Unique to Firms with Direct Investment in a Foreign

question 3

Multiple Choice

A risk unique to firms with direct investment in a foreign county is the potential takeover of the firm's assets by the government of that country. This takeover is called a(n) :

• A) hostile takeover.
• B) political bias.
• C) appropriation.
• D) expropriation.

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Definitions:

Marginal Tax

The tax rate that applies to the last dollar of the taxpayer's income.

Financial Manager

A professional responsible for managing the financial health of an organization, including planning, directing investment activities, and developing financial strategies.

Owners' Equity

The residual interest in the assets of an entity after deducting its liabilities, representing the net worth held by shareholders or owners.