MyLab Finance with Pearson eText -- Access Card -- for Principles of Managerial Finance
15th Edition
ISBN: 9780134479903
Author: Chad J. Zutter, Scott B. Smart
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Videos
Question
Chapter 19.4, Problem 19.12RQ
Summary Introduction
To determine: The long-run benefits of having many local debt and lower MNC-based equity in the capital structure of a foreign subsidiary
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Which of the following factor is NOT related to increasing an MNC's cost of capital?
A.
Risk-free interest rate
B.
Exchange rate
C.
Size of the MNC
D.
Country risk
How may the domestic cost of capital for a foreign venture be adjusted to account for currency rate risk, political risk, and nation risk?
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
Chapter 19 Solutions
MyLab Finance with Pearson eText -- Access Card -- for Principles of Managerial Finance
Ch. 19.1 - Prob. 19.1RQCh. 19.1 - Prob. 19.2RQCh. 19.1 - Prob. 19.3RQCh. 19.1 - Prob. 19.4RQCh. 19.2 - Under FASB No. 52, what are the translation rules...Ch. 19.3 - Prob. 19.6RQCh. 19.3 - Explain how differing inflation rates between two...Ch. 19.3 - Discuss macro and micro political risk. What is...Ch. 19.4 - Prob. 19.9RQCh. 19.4 - Prob. 19.10RQ
Ch. 19.4 - Prob. 19.11RQCh. 19.4 - Prob. 19.12RQCh. 19.5 - Prob. 19.13RQCh. 19.5 - Prob. 19.14RQCh. 19.5 - Prob. 19.15RQCh. 19.6 - Prob. 19.16RQCh. 19 - Prob. 19.1WUECh. 19 - Prob. 19.2WUECh. 19 - Prob. 19.3WUECh. 19 - Prob. 19.4WUECh. 19 - Prob. 19.5WUECh. 19 - Prob. 19.1PCh. 19 - Prob. 19.2PCh. 19 - Prob. 19.3PCh. 19 - ETHICS PROBLEM Is there a conflict between...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Similar questions
- Are there international differences in firms’ financial leverage?Explain.arrow_forwardDetermine the key reasons why a multinational corporation might decide to borrow in a country such as Brazil, where interest rates are high, rather than in a country like Switzerland, where interest rates are low. Provide support for your rationale. What impact does foreign investment have on the weighted average cost of capital calculations?arrow_forwardHow COVID-19 affect international capital market. In general, does the market value of companies reduced or increased?arrow_forward
- Which of the following factors is not expected to generally have a favorable impact on the firm's cost of capital? Group of answer choices easy access to international capital markets. high degree of international diversification. high exposure to exchange rate fluctuations. all of thesearrow_forwardHow foreign currency risk can affect the value of a multinational company?arrow_forwardHow can a firm make a direct foreign investment?arrow_forward
- whether capital generated in the industrialized countries is finding its way to and from emerging markets. Is there some critical distinction between “less developed” and “emerging” breafe paragrpharrow_forwardWhich of the following is NOT a proactive financial strategy related to the OLI paradigm in explaining FDI? strategies to gain lower global cost of capital strategies to reduce global taxation O strategies to reduce operating and transaction exposure All of the above are proactive strategies.arrow_forwardTo create the global capital structure in a MNC, the business must ________. A. diversify to the oversea markets B. increasing its subsidiary's capital structure C. consolidate all of the foreign subsidiaries' capital structure D. expand competition to the other countriesarrow_forward
- Question:2 , Which of the following factors are likely to decrease the weighted average cost of capital for a multinational corporation compared to a domestic firm? Check all that apply: Exposure to country risk International diversification Exposure to exchange rate risk Access to international capital markets Large size Submit.............arrow_forwardHow can the Greater Liberalizations and removal of barrier to trade can stimulate FDI that can incentivise firms to invest overseasarrow_forwardWhat advantages do MNEs, as compared to domestic enterprises, have with regards to raising capital, and are there any cost advantages to them relative to their overall capital structure?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
EBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENT
Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
Intermediate Financial Management (MindTap Course...FinanceISBN:9781337395083Author:Eugene F. Brigham, Phillip R. DavesPublisher:Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
Intermediate Financial Management (MindTap Course...
Finance
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Cengage Learning
How to Invest in Foreign Stocks (INVESTING FOR BEGINNERS); Author: The Money Tea;https://www.youtube.com/watch?v=Qzj4VozcO9s;License: Standard Youtube License