Which of the following factors is not expected to generally have a favorable impact on the firm's cost of capital according to the text?
A) easy access to international capital markets.
B) high degree of international diversification.
C) high exposure to exchange rate fluctuations.
D) all of the above

Question

Quizplus · Accepted Answer

High exposure to exchange rate fluctuations is not expected to generally have a favorable impact on the firm's cost of capital, as it increases the risk and uncertainty associated with the firm's operations and future cash flows. On the other hand, easy access to international capital markets and high degree of international diversification are expected to generally have a favorable impact on the firm's cost of capital, as they can enhance the firm's access to funding sources and reduce its overall risk profile.

Which of the Following Factors Is Not Expected to Generally