A U.S.-based MNC has many foreign subsidiaries in Europe and does not expect to increase its investment there. Its value should increase if the value of the euro weakens over time.

Question

Quizplus · Accepted Answer

A weaker euro would decrease the value of the earnings and assets of the European subsidiaries when converted to U.S. dollars, potentially reducing the overall value of the MNC.

A US-Based MNC Has Many Foreign Subsidiaries in Europe and Does