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

Question

Quizplus · Accepted Answer

Increased external financing by a foreign subsidiary can affect the overall MNC's cost of capital due to differences in interest rates, risk profiles, and currency exposure between the subsidiary and the parent company.

Because Increased External Financing by a Foreign Subsidiary Reduces the External