When an International Company Owns 100 Percent of the Multinational

question 52

Multiple Choice

When an international company owns 100 percent of the multinational firm, this is considered:

• A) capitalization.
• B) full ownership.
• C) profiteering.
• D) corporation management.

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Definitions:

Sinking Fund

A Sinking Fund is a fund established by an issuer of a bond to repay the principal amount of the bond at maturity, usually by setting aside funds over a period of time.

Protective Covenants

Clauses in a bond agreement that impose certain restrictions on the issuer to protect bondholders' interests, such as maintaining minimum financial ratios or limiting further debt issuance.

Indenture Agreement

A contract between a bond issuer and bondholders, specifying terms like interest rates, maturity date, and other conditions.

Term Structure

The relationship between interest rates or bond yields and different terms or maturities, often depicted in a curve.