Other things being equal, a foreign subsidiary in China would more likely be divested by the U.S. parent if new information caused the parent to suddenly anticipate that:
A)the Chinese yuan would depreciate in the future.
B)the Chinese yuan would appreciate in the future.
C)the Chinese yuan would remain somewhat stable in the future.
D)none of the above; the value of the Chinese yuan has no impact on the feasibility of a divestiture.

Question

Quizplus · Accepted Answer

A depreciation of the Chinese yuan would make the subsidiary less valuable in dollar terms, potentially prompting the U.S. parent to divest if it anticipates lower returns on its investment.

Other Things Being Equal, a Foreign Subsidiary in China Would