Theoretically, most MNEs should be in a position to support higher ________ than their domestic counterparts because their cash flows are diversified internationally.
A) equity ratios
B) debt ratios
C) temperatures
D) none of the above

Question

Quizplus · Accepted Answer

MNEs can support higher debt ratios than their domestic counterparts because their cash flows are diversified internationally. This reduces the risk of default and allows them to take on more debt financing. Therefore, option B (debt ratios) is the correct choice. Option A (equity ratios) is incorrect because diversification does not necessarily increase the amount of equity financing available to MNEs. Option C (temperatures) and Option D (none of the above) are clearly incorrect as they are unrelated to the concept being discussed.

Theoretically, Most MNEs Should Be in a Position to Support