A foreign subsidiary with good access to capital within the host country tends to pay ____ dividends to the parent than subsidiaries with poor access to local capital.
A) smaller
B) larger
C) no
D) None of these answers is correct; dividends are not related to availability of capital.

Question

Quizplus · Accepted Answer

A foreign subsidiary with good access to capital within the host country can finance its operations without the need for additional funding from the parent company. This means that the subsidiary can retain more of its earnings and pay larger dividends to the parent company. On the other hand, subsidiaries with poor access to local capital may need additional funding from the parent company, which can limit the amount of dividends they can pay.

A Foreign Subsidiary with Good Access to Capital Within the Host