An MNC's "global" target capital structure is:
A) always debt intensive.
B) always equity intensive.
C) sometimes different from the MNC's "local" capital structure (at a subsidiary).
D) None of these are correct.

Question

Quizplus · Accepted Answer

A multinational corporation's global target capital structure may be different from its local capital structure at a subsidiary. This is because different countries may have different tax laws, financing costs, and other factors that affect the optimal capital structure. Therefore, the global target capital structure may involve a mix of debt and equity that is different from the local capital structure. Option A and B are incorrect as the MNC's capital structure may vary based on several factors.

An MNC's "Global" Target Capital Structure Is