An MNC may deviate from its target capital structure in each country where financing is obtained, yet still achieve its target capital structure on a consolidated basis.

Question

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A multinational corporation (MNC) may have different capital structures in different countries due to varying market conditions, regulations, and tax policies. However, the overall goal for the MNC is to maintain a target capital structure on a consolidated basis, which takes into account the total amount of funding and assets across all countries. This approach allows the MNC to balance its financing costs and risk exposure while maximizing its value for shareholders.

An MNC May Deviate from Its Target Capital Structure in Each