When a Firm Holds Assets in Many Countries

question 98

Multiple Choice

When a firm holds assets in many countries,

• A)the firm's cash flows are internationally hedged.
• B)shareholders of the firm can indirectly benefit from international diversification even if they are not directly holding foreign shares.
• C)shareholders of the firm can directly benefit from international diversification even if they are not directly holding foreign shares.
• D)none of the options

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Definitions:

Firms' Revenues

The total income generated by businesses from selling their goods or services before any expenses are deducted.

Personal Savings

The portion of an individual’s income that is not spent on consumption and is set aside for future use, typically in a savings account or investment.

Marginal Cost

The increase in cost that arises from producing one additional unit of a product or service.

R&D Financing

The process of funding research and development activities, typically involving significant investment in innovation and technology to spur growth and competitive advantage.