Operate a subsidiary in spain

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A German multinational is planning to operate a subsidiary in Spain. Which of the following is correct about the cost of capital for the subsidiary?

Select one:

a. None of these options is correct

b. Two or more of these options are correct

c. It should be same as the parent due to the currencies being the same

d. Always use the parent's historical capital structure

e. Always use the subsidiary's historical capital structure

f. It should be equal to the return required by the firm's shareholders to buy the firm's shares

g. It should reflect the riskiness of the project

Please explain why.

Reference no: EM132509236

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