Because increased external financing by a foreign subsidiary reduces the external financing needed by the parent, such an action will not affect the overall MNC's cost of capital.

Question

Quizplus · Accepted Answer

Increased external financing by a foreign subsidiary may affect the overall MNC's cost of capital since it could potentially increase the MNC's financial risk and lead to a higher cost of capital for the entire organization.

Because Increased External Financing by a Foreign Subsidiary Reduces the External