Why Can a Company More Easily Pursue a Global Strategy

question 7

Multiple Choice

Why can a company more easily pursue a global strategy when it owns 100 percent of foreign operations?

• A)The company is not likely to face overcapacity issues.
• B)The company limits foreign-exchange rate fluctuations.
• C)The company avoids communication misunderstandings.
• D)The company can sub-optimize results in one country in order to optimize results globally.

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Definitions:

Return on Debt

An analysis metric that measures the amount of profit generated from a company's debt, indicating the efficiency of debt management.

Flotation Cost

Flotation cost refers to the total costs incurred by a company in issuing new securities, including underwriting fees, legal fees, registration fees, and other expenses.

Capital Structure

The mix of a company's long-term debt, specific short-term debt, common equity, and preferred equity, which is considered when analyzing a company's financial health.

Project Financing

A financial structure where projects are funded with a loan structure that relies solely on the project's cash flow for repayment, with the project's assets, rights, and interests held as secondary collateral.