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

Question

Quizplus · Accepted Answer

The managerial objective in determining the capital structure for an international firm is to minimize the overall cost of capital. While minimizing exchange rate risk and the risk of expropriation may also be important considerations, the ultimate goal is to strike a balance between these factors and the cost of capital. Available local low-cost financing may not always be the most cost-effective option, so it should be evaluated alongside other financing alternatives.

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