1. What is an advantage of using equity to support the subsidiary? What is a disadvantage? 2....

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1. What is an advantage of using equity to support the subsidiary? What is a disadvantage?

2. If Jim decided to use long-term debt as its primary form of capital to support this subsidiary, should he use dollar-denominated debt or pound-denominated debt?

3. How can the equity proportion of this firm’s capital structure increase over time after it is more established?

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