Empirical Studies Indicate That MNEs Have Higher Costs of Capital

question 5

Multiple Choice

Empirical studies indicate that MNEs have higher costs of capital than purely domestic firms. This could be due to higher levels of:

• A) political risk.
• B) exchange rate risk.
• C) agency costs.
• D) all of the above

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Definitions:

Afterpotential

The change in membrane potential that follows the completion of an action potential in nerve cells.

Astrocytes

Star-shaped glial cells in the brain and spinal cord, involved in physical and nutritional support for neurons, and the repair and scarring process following central nervous system injury.

Blood-Brain Barrier

A selective semipermeable barrier formed by endothelial cells of the brain's capillaries that protects the brain from harmful substances and pathogens in the bloodstream.

CNS

The central nervous system, comprised of the brain and spinal cord, responsible for processing and sending out neural signals.