An MNC May Deviate from Its Target Capital Structure in Each

question 19

True/False

An MNC may deviate from its target capital structure in each country where financing is obtained, yet still achieve its target capital structure on a consolidated basis.

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Definitions:

Third-party Financing

Refers to funding provided by an entity that is neither the borrower nor the direct provider of goods or services, often used in sales agreements to facilitate purchases.

Perfect Tender Rule

A principle in contract law requiring goods delivered under a sales contract to exactly meet the terms of the agreement.

Contract Specifications

Detailed, precise descriptions of the terms, conditions, and obligations agreed upon by parties in a contract, often defining the scope, quality, and timelines of work or services.

Minor Flaws

Small defects or imperfections in an item or product that do not significantly affect its use or value.