A MNE's Marginal Cost of Capital Is Constant for Considerable

question 70

True/False

A MNE's marginal cost of capital is constant for considerable ranges in its capital budget, but this statement cannot be made for most domestic firms.

---

Definitions:

Foreign Currency Units

Units of foreign currency that are used as a medium of exchange for international transactions or investments.

Spot Rate

The current market price at which a particular currency can be bought or sold for immediate delivery.

Forward Rate

The agreed-upon exchange rate for a currency transaction that will occur at a future date.

Forward Contract

A financial agreement to buy or sell an asset at a future date at a price established at the outset, used to hedge against price fluctuations.