If an MNC's Cash Flows Are More Stable, It Can

question 34

True/False

If an MNC's cash flows are more stable, it can probably handle more debt than an MNC with erratic cash flows.

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Definitions:

Special-Interest Effect

A phenomenon where policy decisions are disproportionately influenced by small, well-organized groups at the expense of the larger public interest.

Concentrated Benefit

Concentrated benefit refers to situations in economic policy where a particular policy's benefits are received by a relatively small, identifiable group, while the costs are diffused across a large group.

Principal-Agent Problem

An economic conflict where an individual (the agent) has the responsibility to act for the benefit of another party (the principal), but might fail to do so because of differing interests.