In determining the capital structure for an international firm, the managerial objective is to
A)minimize exchange rate risk
B)minimize the risk of expropriation
C)minimize the overall cost of capital
D)minimize available local low-cost financing

Question

Quizplus · Accepted Answer

The managerial objective for determining the capital structure for an international firm is to minimize the overall cost of capital. This involves selecting a mix of debt and equity financing that will optimize the cost of capital while taking into account the risks and benefits of each source of financing. It is important to consider the cost of debt and equity in both domestic and international markets, as well as the respective risks associated with each. Additionally, accounting for the tax implications of each source of financing can help to reduce the overall cost of capital.

In Determining the Capital Structure for an International Firm, the Managerial