The cost of an MNC's capital can be measured as the cost of its debt plus the cost of its equity, with appropriate weights applied to reflect the percentages of debt and equity.

Question

Quizplus · Accepted Answer

This statement is true. The cost of capital of an MNC (multi-national corporation) can be determined by calculating the weighted average cost of its debt and equity. The weights given to debt and equity reflect the proportions of each that are used to finance the MNC's operations.

The Cost of an MNC's Capital Can Be Measured as the Cost