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Which of the Reasons Listed Below Support a Policy of a High

Question 3

Multiple Choice

Which of the reasons listed below support a policy of a high dividend payout from a foreign operating subsidiary to the parent (a so-called "internal" dividend) ?


A) Devaluation of the local currency in the host country is expected and the MNE wants to remove as many monetary assets as possible from the country before the devaluation occurs.
B) Repatriated profits are subject to additional taxes in the U.S. if the local tax rate is lower than the U.S. rate or to excess foreign tax credits that the company may or may not be able to use in the current period.
C) Local minority shareholders want high and stable dividends.
D) All of the statements above support a high internal dividend payout policy.
E) Only statements a and c support a high internal dividend payout policy.

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