A MNE that borrows long-term in a foreign currency

Name: A MNE that borrows long-term in a foreign currency
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Borrowing in a foreign currency can lead to a lower effective cost of debt if the foreign interest rates are lower, but it also exposes the MNE to transaction exposure, which can result in gains or losses due to currency fluctuations. Additionally, borrowing in dollars at a higher interest rate might be preferable if it reduces currency risk.

A MNE That Borrows Long-Term in a Foreign Currency