Practical consideration in deciding the subsidiary capital structure by the multinational company in a foreign country as follows-

A. The degree of benefit related to lowering of the cost of capital of the subsidiary will be the first priority because the cost of capital should be lowered as it is one of the primary goal of the company.

B. Another factor is lowering of the economic exposure of the company because it can be undertaken by the company through producing in the same country and selling in the same country in order to eliminate the risk.

C. It will also want a lower amount of translation exposure on the books of accounts because translation exposure will be lowering the overall profitability of the companies.

D. it will also consider the interest rate as well as the exchange rates along with the inflation in other country which will be impacting the level of the profits to a high extent.

E. it will also try to maintain a uniformity and synchronisation with the balance capital structure and cost of capital with that of the subsidiary.

F. The capital structure should also be decided after undertaking the high degree of risk and fluctuation associated with the political regime in other countries and the cost associated with it.