If an MNC's cash flows are more stable, it can probably handle more debt than an MNC with erratic cash flows.

Question

Quizplus · Accepted Answer

MNCs with stable cash flows are better equipped to meet debt obligations consistently, making them less risky in the eyes of lenders. Erratic cash flows, on the other hand, can make it difficult for MNCs to repay debt, increasing their risk profile and potentially limiting their ability to obtain additional financing. Therefore, MNCs with stable cash flows can handle more debt than those with erratic cash flows.

If an MNC's Cash Flows Are More Stable, It Can