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Chapter 14 - Chapter 14 Financing Foreign Investment 1 2 3...

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Chapter 14 Financing Foreign Investment 1. Internal sources of funds available for foreign investment do not include . A. the parent equity contributions B. the parent direct loans C. funds provided by operations from retained earnings D. intersubsidiary fund transfers * E. commercial bank loans 2. Many multinational companies are reluctant to make large equity investments in their foreign subsidiaries because . A. dividends to foreign shareholders are normally subject to local income taxes B. dividends to foreign shareholders are usually subject to withholding taxes C. dividends to foreign shareholders are usually subject to foreign exchange risk D. an equity investment is not very flexible for the investor * E. all of the above 3. Parent loans to foreign subsidiaries are usually more popular than equity contributions because . * 4. When a foreign subsidiary has difficulty in borrowing money, a parent may provide its subsidiary a loan guarantee through the following form(s) . * 5. Many foreign subsidiaries in developing countries are not always free to remit their earnings in hard currency mainly because . *
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