If an MNC targets a successful foreign company with plans to continue the target's local business in a more efficient manner, the risk of the business will be relatively ____, and therefore the MNC's required return from acquiring the target will be relatively ____.

Question

Quizplus · Accepted Answer

The risk is relatively low because the target company is already successful in its local market, and the MNC plans to improve efficiency. Consequently, the required return is also relatively low due to the reduced risk.

If an MNC Targets a Successful Foreign Company with Plans