The company of choice is Tesco

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The company of choice is Tesco. There are two elements of MNE's international financial strategy- Sources of finance. In theory, they represent the financing modes of Tesco, largely the use of equity, retained earnings, and debt capital. Sources of funds apply in different situations, depending on the period, how they affect ownership, and if they can be generated by the source. First are the retained earnings. Tesco re-invests parts of its yearly net incomes back to operations. Retained earnings decreased from $4,031 million in 2018 to 3,962 million in 2020. Thus, it was affected by the decline in profit for the year. On to equity financing, the company has a share capital, share premium, and other reserves. The total equity has declined from $13,432 million in 2019 to $13,253 million in 2020. External sources of finance include debts, (both short and long term). The short-term term debts include short term borrowings, lease liabilities, payable, derivative financial instruments deposits from customers and banks, provisions, and current tax liabilities. total current debt has reduced from $20,973 million in 2019 to $17,927 million in 2020. In the long term, Tesco has massively relied on the same debt items, with long term debt also declining from $22,493 million in 2019 to $21,122 million in 2020. As multinational Tesco has cash sources for its liquidity, which include access to credit facilities as well as debt capital markets. Investments are other sources of Tesco's finances. For example, Equity investments such as buying shares into other companies and getting proceeds from the sale of investments or dividends such as Dividends received from Tesco Bank. The company also receives proceeds from Equity instruments issued in addition to assets held for sale. The use of derivative financial instruments also realizes financial proceeds to Tesco. Overall, as MNE, Tesco has a wide range of finance sources and they increase its liquidity and financial positions, especially the Cash and cash equivalents at the end of the year. Dividend policy Tesco is a company that gives back to its shareholders and owners through annual dividends. The policy comprises cash dividends or the option to acquire more Tesco shares. The company is committed to creating value to its shareholders and in the 2020 annual report, the company reported a full-year dividend of 9.15p per share as compared to 5.77p in the previous year Therefore, the dividends have increased by 58.6% year-on-year hence a dividend payout ratio of 50%. Dividend paid is money from the company hence it reduces its financing activities cash flows. However, Tesco dividend policy allows shareholders to reinvest the dividend into its dividend reinvestment plan (DRIP). Re-investing strengthens the firm's investing finances but the large dividends paid to equity holders can inspire more trust in company performance, and boost stock performance (market cap) hence improving the future stability prospects of Tesco globally.