One Argument for Why Subsidiaries Should Be Allowed to Issue

question 43

Multiple Choice

One argument for why subsidiaries should be allowed to issue their own stock is that:​

• A) ​it prevents a potential conflict of interests between the MNC's managers and shareholders.
• B) ​it prevents a potential conflict of interests between the MNC's majority shareholders and minority shareholders.
• C) ​it prevents a potential conflict of interests between the MNC's existing creditors.
• D) ​having local investors as minority shareholders may offer some protection against adverse actions by the local government.

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Definitions:

Human Dignity

A fundamental concept that involves the inherent worth and respect that every individual deserves, irrespective of status, abilities, or accomplishments.

Profit Maximization

The process or strategy focused on increasing the profit of a business to its highest possible level given the constraints it faces.

Servicing Model

A union representation approach focused on directly addressing and managing individual member needs and grievances, as opposed to broader collective bargaining strategies.

Employee Representation

The process by which employees choose individuals or bodies like unions to represent their interests in discussions with management or other authorities.