In Theory, the MNE Should Support ________ Debt Ratios Than

question 45

Multiple Choice

In theory, the MNE should support ________ debt ratios than a purely domestic firm because their cash flows are ________.

• A) lower; more stable due to international diversification
• B) lower; less stable due to international diversification
• C) higher; more stable due to international diversification
• D) higher; less stable due to international diversification

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Definitions:

Commercial Finance Companies

Financial institutions that provide loans to businesses, typically for equipment purchases or other capital needs, often secured by the assets being financed.

State-of-the-Art Equipment

The most advanced and modern tools or machinery available in a field or industry.

Factoring Accounts Receivable

The financial practice of selling a business's invoices to a third party to secure immediate cash flow.

SBA Loans

Loans backed by the Small Business Administration designed to help small businesses get started, expand, or recover.