Hello, I need the right answer to these multiple choices questions:

1) The structure of multinational enterprises (MNEs). MNEs are complex and they come with diverse units. Which of the following claims is TRUE, based on the UN definitions?

a.A foreign associate is an unincorporated enterprise in which an MNE (parent firm) owns an equity stake between 10 and 50 per cent.

b.A firm is considered as an MNE, if it has subsidiaries in two different countries.

c.As we discussed during the first lecture, an international firm is a operating in neighboring countries whereas a global firm has subsidiaries at every continent.

d.An MNE is a firm having least one subsidiary in each TRIAD area / location.

e.A foreign affiliate is an incorporated or unincorporated enterprise in which an MNE (parent firm) owns an equity stake less than 10 per cent.

2)Firms become MNEs in different ways. Which of the following claims is TRUE?

a.Any firm, even a small enterprise, becomes an MNE when it acquires more than 50% of a foreign firm's voting shares.

b.A domestic SME (EU definition; fewer than 250 employees) becomes an MNE when it begins exporting its products or services in a foreign country.

c.Only a large firm (EU definition; at least 250 employees and turnover at least EUR 50 million or balance sheet at least EUR 43 million) can be qualified as an MNE.

d.A domestic SME (EU definition; fewer than 250 employees) becomes an MNE when it begins licensing its products or technologies to a third party in a foreign country.

3)Firms may have various reasons to establish foreign operations. Which of the following claims is TRUE?

a.Laws related to the transfer pricing do not restrict MNEs to shift their operations from a higher to a lower production cost countries.

b.Laws related to the transfer pricing do not allow for MNEs to shift their operations from a higher to a lower production cost countries.

c.Most governments are trying to prevent MNEs to establish operations in their countries.

d.A new geographic location may offer MNE e.g. new market opportunities, physical resources, skilled labor, or cheaper labor. Hence, a location as such, is never a sufficient condition for an MNE to establish a subsidiary.

4)MNEs often have various possibilities to modify their businesses. Which of the following claims is TRUE?

a.Vertical integration means also internalization.

b.Vertical integration of downstream activities = backward integration.

c.High costs of coordination (e.g. supervising of a third party raw material quality in a foreign country) may lead to horizontal but not to vertical integration.

d.Licensing negotiations most often involve asymmetric information, and this asymmetric information prevents vertical integration.

5) As we discussed, acquisitions of publicly listed firms come with some important thresholds. Which of the following claims is TRUE?

a.When you get 29.9% of the shares, you have a right to redeem the shares of the other shareholders.

b.If you earlier had over 30% of the shares and you now increase your share to 90%, you must make a cash offer to all other shareholders to buy their shares.

c.When you get 50% of the shares plus one vote, you have the control over the acquired firm.

d.When you get 30% of the shares, you have a right to redeem the shares of the other shareholders.

6)MNE management is an interesting issue. Which of the following claims is TRUE?

a.Board of directors is a body, which monitors MNE management on behalf of MNE's shareholders.

b.Code of conduct is a set of rules that govern how the board of directors operate.

c.Members in the board of directors get relatively large compensation of their efforts since they spend relatively lot of time working for an MNE.

d.Board of directors is a body, which is responsible of implementing and monitoring firm strategy.

7) Imagine an MNE headquartered in Vilnius, Lithuania, which has a subsidiary in Oulu, Finland. Oulu subsidiary is buying some components (worth 50 million) from the MNE headquarters in Vilnius. At the same time, Oulu subsidiary is selling some other components (worth 50 million) to Vilnius headquarters. Oulu subsidiary is making profit 40 of million and it pays taxes 50% to Finnish tax authorities, i.e. 20 million. Vilnius HQ is making profit of 30 million and it is paying taxes 10% in Lithuania, i.e. 3 million. The total amount of taxes is 23 million. Let us assume that the Finnish authorities allow Oulu subsidiary to increase its intra-firm buying price 20%, and at the same time, lower its intra-firm selling price 20%. Which of the following claims is TRUE?

a.After the changes in the prices, after taxes, shareholders of our imaginary MNE will receive 55 million.

b.After the changes in the prices, our imaginary MNE will end up paying taxes 5 million.

c.After the changes in the prices, our imaginary MNE will end up paying taxes 20 million.

d.None of the above is right.