How Can Local Financing Help MNCs Reduce Country Risk

question 47

Multiple Choice

How can local financing help MNCs reduce country risk?

• A)By raising funds locally,MNCs receive the tactic agreement of the country where the funds are raised that no government actions will be taken that will be adverse to the firm.
• B)If an MNC raises funds locally,it creates local stakeholders in the MNC,and countries may be reluctant to take actions that might damage or reduce the profitability of firms that have local stakeholders.
• C)If an MNC raises funds locally,it gains the support of the local capital markets which,in turn,lobby the local government not to take actions that will adversely affect firms that participate in the local capital market.
• D)When an MNC raises funds locally,it automatically receives special incentives from the local government that reduce country risk.

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Definitions:

Visas

Are official documents or endorsements that allow the bearer to legally enter, remain in, or leave a particular country or territory.

Ethnic Relations

The study of interactions, conflicts, and social dynamics between different ethnic groups within a society.

Slavery

A system where individuals are owned by others, deprived of personal freedom, and compelled to perform labor or services.

Ownership And Control

Refers to the legal and practical relationship between the owner and their property, including the ability to make decisions about its use and disposal.