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1)     )  Wizard, Inc. has a subsidiary in a country where the government

allows only a small amount of earnings to be remitted to the U.S. each year. Should Wizard finance the subsidiary with debt financing by the parent, equity financing by the parent, or financing by local banks in the foreign country?






2)      (5 pts) Explain how the cost of capital for Multinational Companies may differ from that for purely domestic firms (Hint the book lists 5 major differences).






3)     (3 pts) LaSalle Corp. is a U.S.‑based MNC with subsidiaries in various less developed countries where stock markets are not well established. How can LaSalle still achieve its "global" target capital structure of 50 percent debt and 50 percent equity, if it plans to use only debt financing for the subsidiaries in these countries?

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Subject: Business, Finance

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