Empirical Studies Indicate That MNEs Have a Lower Debt/capital Ratio

question 1

True/False

Empirical studies indicate that MNEs have a lower debt/capital ratio than domestic counterparts, indicating that MNEs have a lower cost of capital.

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Definitions:

Annual Percentage Rate

The annual rate charged for borrowing or earned through an investment, which includes all fees and costs.

Effective Annual Rate

The interest rate that describes the full amount of interest paid over one year, considering compounding.

APR

Annual Percentage Rate; the annual rate charged for borrowing or earned through an investment, inclusive of any fees or additional costs.

Effective Rate

The actual interest rate on a loan or investment, taking into account the effect of compounding over a given period of time.