Because increased external financing by a foreign subsidiary reduces the external financing needed by the parent, such an action will not affect the MNC's overall cost of capital.

Question

Quizplus · Accepted Answer

Increased external financing by a foreign subsidiary may affect the MNC's overall cost of capital, as it can impact the subsidiary's cost of capital, currency exchange rates, and other factors that can ultimately impact the parent company's cost of capital.

Because Increased External Financing by a Foreign Subsidiary Reduces the External