Because Some Countries Have a Lower Withholding Tax on Interest

question 12

Multiple Choice

Because some countries have a lower withholding tax on interest than they do for dividends, multinational corporations may finance foreign operations with debt rather than equity. What additional reason may an MNC have for using this investment strategy?

• A) Interest is generally a deductible expense, whereas dividends paid are not.
• B) Dividends require a cash outflow but interest does not.
• C) Cash flows from dividends must be discounted using the cost of capital, which is not the case for interest.
• D) All of the above

---

Definitions:

Eating Behaviors

Patterns or habits related to how individuals consume food, including food choices, eating speed, and meal timing, which can impact overall health.

Enjoyable Exercise

Physical activity that is pleasing and fun, encouraging regular engagement and promoting health.

Modest Goal

A goal that is reasonable, realistic, and attainable, without being overly ambitious.

Gradually Increase

The process of slowly raising the level, amount, or intensity of something, often used in contexts like exercise, workload, or medication dosage.