With Regard to the Financial Structure of a Foreign Subsidiary

question 9

Multiple Choice

With regard to the financial structure of a foreign subsidiary

• A)one option is to conform to the parent company's capital structure.
• B)one option is to conform to the local norm of the country where the subsidiary operates.
• C)one option is to vary judiciously to capitalize on opportunities to lower taxes, reduce financing costs and risks, and take advantage of market imperfections.
• D)all of the above

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Definitions:

Tenancy In Common

A form of co-ownership where each owner holds an individual, undivided interest in the property, and there is no right of survivorship.

Community Property

A form of joint property ownership typically between spouses in which assets acquired during marriage are owned equally.

Joint Tenancy

A form of property ownership in which two or more individuals hold equal shares and rights; upon the death of one tenant, their share automatically transfers to the surviving tenant(s).

Life Tenant

An individual who has the right to use and benefit from property during their lifetime, after which the property passes to another designated party.