According to your text, which of the following is not a factor that increases an MNC's cost of capital?
A) higher exposure to exchange rate risk.
B) higher exposure to country risk.
C) an increase in the risk-free interest rate.
D) an increase in the size of the MNC.

Question

Quizplus · Accepted Answer

The size of an MNC does not necessarily increase its cost of capital, as size alone does not necessarily add additional risk factors. However, higher exposure to exchange rate and country risk, as well as an increase in the risk-free interest rate, can all lead to an increase in the cost of capital for an MNC.

According to Your Text, Which of the Following Is Not