How the terrorist attack could have altered the capital

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a) Why might a form use a "local" capital structure at a particular subsidiary that differs substantially from its "global" capital structure?

b) Rose Inc., a U.S. company, needed to infuse capita into its foreign subsidiaries to support their expansion. As of August 2001, it planned to issue stock in the U.S. However, after September 11, 2001 terrorist attack on the U.S., it decided that long-term debt was a cheaper source of capital. Explain how the terrorist attack could have altered the capital structure decision.

Reference no: EM132601525

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