Dividend payments from foreign subsidiaries represent ____.
A) a movement from a weak to a stronger currency
B) the primary means of transferring funds to the parent company
C) a way to avoid taxes
D) the effects of exchange risk

Question

Quizplus · Accepted Answer

Dividend payments from foreign subsidiaries are a primary means for multinational companies to transfer funds to their parent company. This helps to consolidate financial resources and maximize profits. Dividend payments may also have tax implications, but this is not their primary purpose. Exchange risk may come into play if the currency of the subsidiary weakens relative to the parent company's currency, making the dividend payments less valuable. However, this is not the only effect of dividend payments from foreign subsidiaries.

Dividend Payments from Foreign Subsidiaries Represent ____