Financing Corporate Expansion
Intensity Games is an MNE based in San Francisco that manufactures a popular line of video game consoles and accessories. Intensity owns manufacturing facilities in China and Russia where the components of the game consoles are manufactured and assembled before being shipped around the world. Intensity also owns numerous subsidiaries that manufacture game cartridges for Intensity game platforms. Intensity managers have determined that the firm needs to expand the Chinese facility to accommodate increased demand. The firm needs to raise several million dollars to finance the expansion. The financial managers of Intensity are discussing the various financing options available to the firm.
-Which of the following questions would be more important for Intensity financial managers to evaluate when deciding the best method for the firm to raise funds?

Question

Financing Corporate Expansion 
Intensity Games is an MNE based in San Francisco that manufactures a popular line of video game consoles and accessories. Intensity owns manufacturing facilities in China and Russia where the components of the game consoles are manufactured and assembled before being shipped around the world. Intensity also owns numerous subsidiaries that manufacture game cartridges for Intensity game platforms. Intensity managers have determined that the firm needs to expand the Chinese facility to accommodate increased demand. The firm needs to raise several million dollars to finance the expansion. The financial managers of Intensity are discussing the various financing options available to the firm.
-Which of the following questions would be more important for Intensity financial managers to evaluate when deciding the best method for the firm to raise funds?

Quizplus · Accepted Answer

The most economical type of debt financing is crucial for determining the best method to raise funds for expansion, as it directly impacts the cost of borrowing and the overall financial strategy of the company.