Of the Following, Which Is NOT Considered to Be an Advantage

question 10

Multiple Choice

Of the following, which is NOT considered to be an advantage to MNEs of having a financial structure adhere to local debt norms?

• A)A localized financial structure reduces criticism of foreign subsidiaries that have previously used a different capital structure.
• B)A localized financial structure helps management evaluate return on equity investment relative to local competitors in the same industry.
• C)MNE have a competitive advantage over the locals, thus by using the local capital structure, the MNE is even stronger.
• D)All of the above are noted as advantages to having a localized capital structure.

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Definitions:

Heuristics

Simple, efficient rules, either hard-coded by evolutionary processes or learned, which help in making decisions, forming judgments, or solving problems.

Error-Free Decisions

Decisions made without mistakes, achieved through careful analysis, planning, and consideration of all relevant information.

Recognition Heuristics

A cognitive shortcut where a decision is made based on the recognition or familiarity of an option rather than on a detailed comparison or analysis.

Hardwired Heuristics

Innate or instinctual mental shortcuts that humans use to make decisions or solve problems efficiently.