Other things being equal, the financial leverage of MNCs will be higher if the governments of their home countries are ____ likely to rescue them (in the event of failure), and if their home countries are ____ likely to experience a recession.
A) more; more
B) less; more
C) less; less
D) more; less

Question

Quizplus · Accepted Answer

MNCs are likely to have higher financial leverage if they expect government bailouts (more likely to rescue) and if their home countries are stable (less likely to experience a recession), as this reduces perceived risk.

Other Things Being Equal, the Financial Leverage of MNCs Will