What are some of the advantages and disadvantages of having highly leveraged foreign subsidiaries?
Answer to relevant QuestionsCompania Troquelados ARDA is a medium-sized Mexico City auto parts maker. It is trying to decide whether to borrow dollars at 9% or Mexican pesos at 75%. What advice would you give it? What information would you need before ...A firm with a corporatewide debt-to-equity ratio of 1:2, an after-tax cost of debt of 7%, and a cost of equity capital of 15% is interested in pursuing a foreign project. The debt capacity of the project is the same as for ...Who is likely to gain more from investing overseas, a resident of the United States or of Mexico? Explain.a. In 1992, the Brazilian market rose by 1,117% in cruzeiro terms, while the cruzeiro fell by 91.4% in dollar terms. Meanwhile, the U.S. market rose by 8.5%. Which market did better?b. In 1993, the Brazilian market rose by ...What factors help determine whether a firm will export its output, license foreign companies to manufacture its products, or set up its own production or service facilities abroad? Identify the competitive advantages that ...
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