When the Choice of Financing a Foreign Subsidiary Is Between

question 79

Multiple Choice

When the choice of financing a foreign subsidiary is between external debt and equity financing

• A)political risk considerations tend to favor the latter.
• B)political risk considerations tend to favor the former.
• C)political risk is separate from financial risk and so does not enter into a discussion of debt equity ratios.
• D)none of the options

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Definitions:

Three-Phase Bank

Single-phase transformers connected in such a way as to operate on a three-phase system.

Single-Phase Transformers

Transformers designed to operate on an AC power supply of single phase, meant for transferring electrical energy between circuits.

Transformation

A thorough or dramatic change in form or appearance, often used in reference to energy conversion processes.

Secondary Voltage

The output voltage of a transformer or another device that reduces or increases voltage from the primary voltage supplied to it.