​Assume That an MNC Has Very Stable Cash Flows and Uses

question 20

Multiple Choice

​Assume that an MNC has very stable cash flows and uses very little debt. Its cost of debt should be:

• A) ​lower than its cost of equity.
• B) ​higher than its cost of equity.
• C) ​lower than the country's risk-free rate.
• D) ​lower than its credit risk premium.

---

Definitions:

Psychoanalytic Theory

A framework for understanding human behavior that emphasizes unconscious psychological processes.

Experimental Data

information gathered through controlled tests or experiments to support or reject a hypothesis.

Freudian Interpretation

An analytical method based on Sigmund Freud's theories, primarily involving the unconscious mind's influence on behavior.

Slips of the Tongue

Unintentional errors in speech where the speaker says something other than what they intended, often revealing underlying thoughts or conflicts.