Transferring Profits from a Foreign Subsidiary to the Parent Corporation

question 84

Multiple Choice

Transferring profits from a foreign subsidiary to the parent corporation through dividends,royalties,or management fees is called

• A) technology transfer.
• B) activity-based costing.
• C) transfer pricing.
• D) repatriation of profits.
• E) transnational funding.

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Definitions:

Incremental Fair Value

The additional amount that a company expects to earn from acquiring a new asset over its current market value.

Vesting Period

The period of time an employee must wait until they have the full right to exercise their stock options or benefits.

Exercise Price

The price at which the holder of an option can buy (for a call option) or sell (for a put option) the underlying security or commodity.

Equity Instruments

Financial instruments that signify an ownership interest in an entity, such as stocks or share options.