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To create the global capital structure in a MNC, the business must ________.
diversify to the oversea markets
increasing its subsidiary's capital structure
consolidate all of the foreign subsidiaries' capital structure
expand competition to the other countries
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- 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.............Which of the following does NOT refer to the ways of how a multinational company can reduce political risk? Taking a conservative approach to investment and adjusting NPV of the project by reducing expected cash flows or by increasing the cost of capital in accordance with existing trends. Purchasing insurance policy against political risks. Acquiring minor shares in foreign corporations. Creating a joint venture with local partners or a consortium with other multinational companies.In a free enterprise system, the overriding objective of firms wanting to invest abroad is to a. use joint production and sales distribution networks to increase revenue. b. acquire other companies. c. maximize shareholder wealth. d. make a brand name.
- Which of the following is matter if a U.S. parent firm plans to completely finance the establishment of its British subsidiary with existing funds from retained earnings. The discount rate of the NPV from the project would be affected by ______. A. the parent's cost of capital B. the sales volume of the subsidiary C. the economic conditions D. the cost of borrowingInternal benchmarking is optimal for companies which?a) Have a diverse platform of wholly owned subsidiariesb) Have a range of international divisions, producing differentproductsc) Have a range of similar subsidiaries, producing similarproducts at similar market conditionsA key dynamic within any Multi-National Corporation (MNC) is cash and foreign exchange risk exposure. Cash management is critical and also heavily influenced by global dynamics, especially since COVID-19. Within the Caribbean and North American jurisdiction, the economic frameworkis tightly connected with the major Asian economies of China, the United Kingdom and Japan. The Caribbean and the North American economy have been a barometer of the global economic cycle. For both Caribbean and North American economies, many Multi-National Corporations havemade significant investments to reduce the production cost of goods and diversification benefits. Despite the benefits that could materialize, some North American countries have not been resilient through Global market shocks. Given this context, the following questions require research withinthe Caribbean context and current market dynamics since COVID-19. You have been asked to evaluate possible sites for a Caribbean production facility…
- Explain the role of private multinational corporations (MNCs) in foreign direct investment indeveloping countries. In your answer:• Describe what a multinational corporation is, with specific reference to their most commoncharacteristics.A large nation-wide bank’s acquisition of a major investment advisory firm would be an example of a: a. market extension merger. b. conglomerate merger. c. product extension merger. d. horizontal merger.Describe the importance of international capital structure. What risks can you identify when working with cash, credit, and inventory management? Discuss what risks apply when discussing strategies for financing a foreign operation? Provide your rationale and any supporting data. Consider how a Christian worldview perspective on personal debt may conflict with how a multinational company leverages debt to finance its operations and growth. Refer to the topic resources provided and support your position using specific Bible references.
- How can the optimization of a mutltinational corporation cash flow distort the profits of a subsidiary that is based in North America?Which of the following is a function of the primary capital market a. To allow the Foreign Institutional Investors (FIls) to invest in the Indian capital markets b. To allow the companies to raise funds to meet their short term funds requirements through new securities O c. To provide a market for trading with the outstanding long term securities O d. To provide a market for trading with the existing short term securitiesWhich of the following is a function of the primary capital market a.To allow the Foreign Institutional Investors (Fils) to invest in the Indian capital markets b To allow the companies to raise funds to meet their short term funds requirements through new securities c. To provide a market for trading with the outstanding long term securities d. To provide a market for trading with the existing short term securities