Will ventura benefit more from exchange rate effects

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Reference no: EM13935665

Impact of financing on NPV. Ventura plc, a UK- based MNC, plans to establish a subsidiary in Japan. It is very confident that the Japanese yen will appreciate against the pound over time. The subsidiary will retain only enough revenue to cover expenses and will remit the rest to the parent each year. Will Ventura benefit more from exchange rate effects if its parent provides equity financing for the subsidiary or if the subsidiary is financed by local banks in Japan? Explain.

Reference no: EM13935665

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