Empirical studies indicate that WACC for an MNE is higher than for their domestic competitors. Reasons cited for this increased cost include all of the following EXCEPT:
A) agency costs.
B) foreign exchange risk.
C) political risk.
D) All of the above are cited as reasons for an MNE's increased WACC.

Question

Quizplus · Accepted Answer

All of the aforementioned factors (agency costs, foreign exchange risk, and political risk) are cited as reasons for an MNE's increased WACC.

Empirical Studies Indicate That WACC for an MNE Is Higher