Question Details

Texas needed to infuse capital into its foreign subsidiaries 


1. Effects of September 11. Rose, Inc., of Dallas, Texas needed to infuse capital into its foreign subsidiaries to support their expansion. As of August 2001, it planned to issue stock in the U.S.
However, after the 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 two forms
of capital.
2. Nike- Cost of Capital. If Nike decides to expand further in South America, why might its capital
structure be affected? Why will its overall cost of capital be affected?



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