Based on the factors that influence a country's cost of capital, the cost of capital in less developed countries is likely to be ____ than in the United States and ____ than in Japan.
A) higher; higher
B) higher; lower
C) lower; lower
D) lower; higher

Question

Based on the factors that influence a country's cost of capital, the cost of capital in less developed countries is likely to be ____ than in the United States and ____ than in Japan.​
A) ​higher; higher
B) ​higher; lower
C) ​lower; lower
D) ​lower; higher

Quizplus · Accepted Answer

The cost of capital in less developed countries is typically higher than in developed countries like the United States and Japan due to factors such as higher risk (political, economic, and currency risks), less efficient financial markets, and lower levels of investor protection.

Based on the Factors That Influence a Country's Cost of Capital