With regard to the financial structure of a foreign subsidiary

Question

Quizplus · Accepted Answer

The best approach is to consider all of the options and choose a financial structure that balances the needs of the subsidiary with those of the parent company. Depending on the circumstances, it may be best to conform to the parent company's capital structure or the local norms of the country where the subsidiary operates. However, in some cases, there may be opportunities to take advantage of market imperfections or lower taxes and financing costs by varying the financial structure judiciously. Therefore, all of the options should be considered and evaluated based on their potential impact on the subsidiary's financial performance and the parent company's overall financial position.

With Regard to the Financial Structure of a Foreign Subsidiary