If an MNC targets a successful foreign company with plans to continue the target's local business in a more efficient manner, the risk of the business will be relatively ____, and therefore the MNC's required return from acquiring the target will be relatively ____.
A)high; high
B)high; low
C)low; high
D)low; low

Question

Quizplus · Accepted Answer

When an MNC targets a successful foreign company with plans to continue its local business more efficiently, the risk associated with the business is considered low because the business model is already proven to be successful. Consequently, the MNC's required return from acquiring the target would be relatively low, reflecting the lower risk.

If an MNC Targets a Successful Foreign Company with Plans