The principal advantages of investing in foreign affiliates in the form of debt instead of equity is to

Question

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Investing in foreign affiliates in the form of debt can reduce taxes because interest payments are tax-deductible expenses for the affiliate, while dividends paid on equity are not. It can also reduce the impact of currency controls because debt is typically repaid in the local currency, whereas equity investments may be subject to restrictions or limitations on repatriation of profits. Therefore, both options, A and B, are the advantages of investing in foreign affiliates in the form of debt.

The Principal Advantages of Investing in Foreign Affiliates in the Form