Question

Factors that influence of corporate characteristics include the following except

a.            M N C’s Cash Flow Stability — M N Cs with more stable cash flows can handle more debt because there is a constant stream of cash inflows to cover periodic interest payments on debt.

b.            M N C’s Credit Risk — M N Cs that have lower credit risk have more access to credit.

c.             M N C’s Access to Retained Earnings — Highly profitable M N Cs may be able to finance most of their investment with retained earnings and therefore use an equity-intensive capital structure.

d.            M N C’s Guarantees on Debt — If the parent backs the debt of its subsidiary, the subsidiary’s borrowing capacity might be increased.

e.            All of them

Answer 1

We see that all of these are factors that are influence of corporate characteristics