In financing a foreign subsidiary, an international firm borrows money from local banks or financial institutions. This financing approach works well when:
A) The company and the bank know each other very well
B) National interest rates can be kept low
C) Local stock markets are undeveloped
D) None of the above
E) All of the above

Question

Quizplus · Accepted Answer

Financing a foreign subsidiary by borrowing from local banks or financial institutions is effective when the company and the bank have a good relationship (A), when national interest rates are low (B), and when local stock markets are undeveloped (C), making local borrowing a more viable option.

In Financing a Foreign Subsidiary, an International Firm Borrows Money