In general, an MNC's size, its access to international capital markets, and international diversification are favorable to an MNC's cost of capital. Group of answer choices True False

Q: Which combination of investment policy and financing policy related to working capital provides the…

A: RELAXED AND CONSERVATIVE  Relaxed policy estimates the current assets for achieving the target…

Q: What weights should be used when you calculatethe WACC? Discuss the choice between book value and…

A: The weights should be used on a proportionate basis of equity, debt, and preferred stock when WACC…

Q: Vhich of the following is NOT a proactive financial strategy related to the OLI paradigm in…

A: OLI stands for Ownership advantages, location advantages and internationalisation advantages.

Q: Compare and contrast the major global investment philosophies. Which investment philosophy, or set…

A:

Q: Which of the following is not a determinant of investment? a) The efficiency of capital equipment…

A: To increase capital assets, business do investments in property, fixed assets, financial market,…

Q: Under what circumstances should the Profitability Index be used to select projects? Question…

A: The Profitability Index (PI), also known as the Profit Investment Ratio (PIR) or Value Investment…

Q: two mutually exclusive projects were being compared, would a high cost of capital favor the…

A: Step -2 in the answer

Q: Diversification can reduce or eliminate __________ risk.   Group of answer choices   all market…

A: Portfolio refers to basket of different financial assets in which investment is made by single…

Q: O a. revenue estimates. O b. current fixed asset levels. O c. qualitative factors. Od. currency…

A: The process of assessing a long-term investment's potential profitability is known as capital…

Q: If a firm has a relatively aggressive current asset financing policy vis-á-vis other firms in its…

A: Current assets are those short term assets that remain in the business for a short period of time.…

Q: What do managers use to evaluate domestic and international capital investment projects?   A)…

A: Capital investment decisions are a crucial part of any business. To ensure long-term profitability,…

Q: A very high degree of capital market efficiency   a. mispricing never occurs.     b. means share…

A: In this question we have four options for the given statement and we need to choose correct option.…

Q: In a world of much friction and imbalance, discuss how Miller and Modigliani (M&M) arrive at the…

A: Miller and Modigliani (M&M) Approach is a capital theory approach propounded in 1950 which…

Q: Which combination of investment policy and financing policy related to working capital provides the…

A: A relaxed current asset investment policy is one under which relatively large amounts of current…

Q: Which of the following statements is true about perfect capital markets?   Group of answer choices…

A: A perfect capital market is a market that has some idyllic properties. In a perfect capital market…

Q: The cost of capital is sometimes referred to as the discount rate or the opportunity cost. What it…

A: Cost of capital is very important in capital budgeting decision making.

Q: In practice, external factors can impact a capital investment. Give a current external factor that…

A: Current external factors which impact or cause instability of capital spending here or abroad.

Q: Identify which one of the following is not the importance of capital market? a. Effective…

A: Capital markets are very important for countries to grow business and mobilize money.

Q: Which of the following factors are likely to decrease the weighted average cost of capital for a…

A: Weighted average cost of capital is the required rate of return which investors would expect from…

Q: Many factors influence capital structure decisions; and as we will see, determining the optimal…

A: Optimal Capital Structure- The optimal capital structure of a firm is the judicious and best mix of…

Q: Identify the corect statement: O H EBIT is expected to be below the indifference point, the firm…

A: EBIT - EPS indifferent point is the EBIT level at which EPS is same

Q: e following choices, which would be the best way to estimate the cost of capital (discount rate) for…

A: WACC is cost of capital of the company and is the weighted average cost of equity and weighted cost…

Q: A firm's cost of capital indicates A firm must earn [Select] provided. [Select] the risk of the…

A: Cost of capital: It is calculated using the formula: Cost of capital= Risk free rate of return+…

Q: How does a cost-efficient capital market help reduce the prices of goods and services? Describe the…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: MNC's and domestic companies both try to optimize their weighted cost of capital.

A: The answer is given below with explanation:

Q: Which of the following factor is NOT related to increasing an MNC's cost of capital? A. Risk-free…

A: Cost of capital means the rate of return a company is getting its borrowings at. Cost of capital is…

Q: The relationship between WACC and investors' required rates of return The required rate of return of…

A: WACC is the weighted average cost of capital. It is minimum return company should achieve to accept…

Q: 1.Which of the following is not something that you would consider when evaluating the optimal…

A: Optimal capital structure is the combination of equity and debt that would maximize the company's…

Exchange Rate Risk

It is the possibility that the value of a currency will fluctuate in the future. In the wake of globalization, business establishments have increasingly ventured into international markets. The volume of international trade has prospered excellently in the near past and is expected to be more affluent in the future. The use of exchange-traded derivative financial instruments has been multi-folded to provide for the requirements of various MNCs and offshore potential investors. Most banks and financial institutions have helped integrate the global economies. Our Government has introduced some bold and extreme measures to fulfil the purpose behind the fiscal, industrial, and monetary policies. The enactment of GST is a huge step towards streamlining the taxation system of the country. Owing to Covid-19, this aspect of corporate risk management has become critical.