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

question 50

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.

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Definitions:

Profit-Maximizing Level

The output quantity at which a firm achieves the highest possible profit by equating marginal revenue with marginal cost.

Output

The total amount of goods and services produced by an economy over a specific period.

Graph

A visual representation of data designed to show the relationship between two or more variables in a clear and concise way.

Perfect Competition

A market structure characterized by a complete absence of rivalry among the producers, with many buyers and sellers, each of whom has a negligible impact on the market.