Which of the Following Is an Observation About the Cost

question 104

Multiple Choice

Which of the following is an observation about the cost of capital?

• A) The cost of capital is typically higher in the global capital market.
• B) Domestic capital markets have more liquidity than global markets.
• C) Local debt financing raises the cost of capital if liquidity is limited.
• D) A local sale of equity is preferred to global sale by international firms.

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Definitions:

Communist Countries

Nations that follow a system of government based on the principles of communism, where the state controls the means of production.

Capitalist Countries

Nations whose economic systems are characterized by private ownership of property and businesses, with the goal of generating profit.

Command-based Systems

Systems, particularly in computing or governance, where actions and processes are directed through explicit commands from a central authority.

Market-based Systems

Economic systems where decisions regarding investment, production, and distribution are based on supply and demand, and prices are determined in free markets.