An Argument for MNCs to Have a Debt-Intensive Capital Structure

question 69

Multiple Choice

An argument for MNCs to have a debt-intensive capital structure is:

• A) they are well diversified.
• B) they can reduce the chance of bankruptcy.
• C) it spreads the shareholder base.
• D) it forces subsidiaries to pay dividends to shareholders.

---

Definitions:

Accumulated Depreciation

The total amount of depreciation for a fixed asset that has been charged to expense since that asset was acquired and put into use.

Fair Market Value

The estimated price at which an asset would change hands between a willing buyer and a willing seller, with both parties having reasonable knowledge of all relevant facts and neither being compelled to buy or sell.

Accounts Payable

Accounts payable are liabilities or money owed by a company to its creditors for goods and services received.

Uniform Partnership Act

Laws enacted in most states that govern how a partnership is formed, operated, and liquidated.