Financing Alternative Appropriate to Protect the Subsidiary
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Drexel Co. is a U.S. based company that is establishing a project in a politically unstable country. It is considering two possible sources of financing. Either the parent could provide most of the financing, or the subsidiary could be supported by local loans from banks in that country. Which financing alternative is more appropriate to protect the subsidiary?
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The solution determines financing alternative is more appropriate to protect the subsidiary.
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The subsidiary can be more appropriately protected by being supported by local loans from banks in that country. This is so ...
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