One of the first decisions that an MNC has to make when considering financing is whether to pursue:

Question

Quizplus · Accepted Answer

It is important for an MNC to consider whether to use internal or external financing. Internal financing may involve using its own profits or retaining earnings to fund its operations, whereas external financing involves borrowing funds from external sources such as banks or issuing bonds or stocks. The choice will depend on various factors such as the cost of capital, availability of funding sources, risk tolerance, and growth plans. In general, internal financing may be preferred as it avoids the costs and risks associated with external financing, but in some cases, external financing may be necessary to enable the firm to grow and expand.

One of the First Decisions That an MNC Has to Make