Both theory and empirical evidence indicate that the capital structures of MNCs differ from those of purely domestic firms.

Question

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Theory suggests that MNCs may have access to a wider range of financing options due to their global presence and diversified operations. Empirical evidence also shows that MNCs tend to have higher leverage ratios and use more long-term debt than domestic firms. Additionally, MNCs may use internal financing from their subsidiaries located in different countries, as well as currency hedging strategies.

Both Theory and Empirical Evidence Indicate That the Capital Structures