Empirical Studies Indicate That WACC for an MNE Is Higher

question 57

Multiple Choice

Empirical studies indicate that WACC for an MNE is higher than for their domestic competitors. Reasons cited for this increased cost include all of the following EXCEPT:

• A) agency costs.
• B) foreign exchange risk.
• C) political risk.
• D) All of the above are cited as reasons for an MNE's increased WACC.

Recognize the significance of extranets and procurement portals in fostering collaboration and streamlining supplier transactions.

Understand the concept of customer attrition and its impact on organizations.

Identify the diverse customer interactions within an organization and their importance.

Describe alternatives to traditional on-premise CRM systems, including their advantages and disadvantages.

---

Definitions:

Realized Holding Gains

Gains that are recognized when assets such as investments are actually sold for more than their cost, reflecting actual rather than potential profit.

Inventory Costs

Inventory costs include all expenses related to acquiring, holding, and managing inventory, including purchase costs, storage, and handling.

Cost Flow Assumptions

Assumptions made about how costs flow through inventory accounts that affect the cost of goods sold and ending inventory valuation.