​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.

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Definitions:

Industrial Engineering

The branch of engineering dealing with the optimization of complex processes or systems.

Job Enrichment

The process of making a job more rewarding, interesting, and engaging by adding more meaningful tasks and duties.

Decision-making Authority

The power or right conferred on individuals or groups to make important decisions and choices within an organization.

Job Rotation

A human resources strategy where employees are moved between different jobs or tasks at a company to gain experience and skills.