An MNC will always use the same required rate of return in the valuation of foreign projects, as it would for its domestic projects.

Question

Quizplus · Accepted Answer

An MNC may use a different required rate of return in the valuation of foreign projects, as it may face additional risks such as political risks, currency exchange risks, and legal risks in foreign countries that may not exist in its domestic market. The MNC may need to adjust its required rate of return to account for these additional risks.

An MNC Will Always Use the Same Required Rate of Return