The international availability of capital to MNEs
A) allows the firm to avoid income taxes.
B) allows the firm to shift tax payments to other counties.
C) allows the firm to lower their cost of equity, relative to domestic firms.
D) none of the above.

Question

Quizplus · Accepted Answer

The international availability of capital to MNEs allows them to tap into a larger pool of investors, which can potentially lower their cost of equity compared to domestic firms. This is because international investors may be willing to accept lower returns due to the diversification benefits of investing in multiple countries. However, this does not necessarily allow the firm to avoid or shift taxes to other countries.

The International Availability of Capital to MNEs