Intercorporate Investments Analysis Implications Validity of Taking Up Earnings dollar-for-dollar equivalence of earnings cannot be taken for granted because: .o A regulatory authority can sometimes intervene in a subsidiary's 令 dividend policy .o A subsidiary can operate in a country where restrictions exist on remittance of earnings or where the value of currency can deteriorate rapidly .2 Dividend restrictions in loan agreements can limit earnings accessibility .s Presence of a stable or powerful minority interest can reduce a parent's discretion in setting dividend or other policiesIntercorporate Investments Analysis Implications Validity of Taking Up Earnings—dollar-for-dollar equivalence of earnings cannot be taken for granted because: ❖ A regulatory authority can sometimes intervene in a subsidiary’s ❖ dividend policy ❖ A subsidiary can operate in a country where restrictions exist on remittance of earnings or where the value of currency can deteriorate rapidly ❖ Dividend restrictions in loan agreements can limit earnings accessibility ❖ Presence of a stable or powerful minority interest can reduce a parent’s discretion in setting dividend or other policies