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

Good access to capital in the host country means that the foreign subsidiary can finance its operations and growth locally, without relying on the parent company's resources. This enables the subsidiary to generate higher profits and cash flows, which can be distributed to the parent as larger dividends. In contrast, subsidiaries with poor access to local capital may need to retain more earnings to fund their operations, and may pay smaller dividends as a result. Therefore, the statement implies that there is a positive relationship between access to local capital and dividend payments to the parent company.

A Foreign Subsidiary with Good Access to Capital Within the Host