Dividend payments are an uncommon way for foreign subsidiaries to transfer money to the parent firm. The statement given is False.
A dividend is the distribution of profits to shareholders by a corporation. When a corporation makes a profit or has a surplus, it has the option of paying a portion of that profit as a dividend to its shareholders. Any money that is left over is taken out and put back into the business.
A foreign subsidiary, sometimes known as a parent company or holding company, is a smaller corporation with operations outside of its home country that is a division of a larger company with headquarters elsewhere. A parent company, also referred to as a parent firm, is a company that has a sizable number of voting shares and consequently has authority over other, smaller companies.
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