The cost of capital may be different for a foreign project than for an equivalent domestic project because foreign projects may be more or less risky.

Question

Quizplus · Accepted Answer

The cost of capital calculation incorporates the risk associated with a project, and the risk may be different for a foreign project than a domestic project. This could be due to factors such as political, economic, legal, or cultural differences. Therefore, the cost of capital for a foreign project may be different than for an equivalent domestic project.

The Cost of Capital May Be Different for a Foreign