Which of the following financing tactics would most likely help an MNE avoid bankruptcy?
A)integrating e-commerce opportunities with domestic sales in order to maintain a steady balance of income and expenditures
B)agreeing to forward contracts with customers and hedging purchases and sales on future currency rates
C)organizing the capital structure so that the amount of debt financing is twice the level of equity financing
D)keeping the percentage of debt in the capital structure to a level that can be managed even during difficult business conditions

Question

Quizplus · Accepted Answer

Keeping the percentage of debt in the capital structure to a manageable level can help an MNE avoid bankruptcy during difficult business conditions. Option A may help in maintaining income and expenditures but may not directly prevent bankruptcy. Option B may help with currency exchange risks but does not necessarily prevent bankruptcy. Option C may lead to a high level of debt, which can be risky for the MNE, especially during tough business conditions.

Which of the Following Financing Tactics Would Most Likely Help