Solution forGretz Tool Company is a large U.S based Multinational Corporation with subsidiaries in eight different countries. The parent of Gretz provided initial cash infusion to establish each subsidiary. However, each subsidiary has had to finance its own growth since then. The parent and subsidiaries of Gretz typically use Citicorp (the largest bank in the United States, with branches in numerous countries) when possible to facilitate any flow of funds necessary.
- Explain the various ways in which Citicrop could facilitate Gretz's flow of funds and identify the type of financial market where that flow of funds occurs. For each type of financing transaction, specify whether Citicrop would serve as the creditor or would simply be facilitating the flow of funds to Gretz.
- Recently, the British subsidiary called on Citicrop for a medium-term loan and was offered the following alternatives: