Question A company believes that interest rates will increase in the near future

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A company believes that interest rates will increase in the near future and stay at higher levels. This company should borrow at a:

A company believes that interest rates will increase in the near future and stay at higher levels. This company should borrow at a:

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Should tax-related factors be considered in evaluating a foreign target?

Should tax-related factors be considered in evaluating a foreign target?

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Counterpurchase:

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MNCs sometimes measure country risk by assigning weights to factors. Which of the following is correct:

MNCs sometimes measure country risk by assigning weights to factors. Which of the following is correct:

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The Export-Import Bank of the U.S. offers various programs, including:

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A U.S. MNC is considering investing in Portuguese securities. The exchange rate is € = $1.33. If the euro depreciates, the effective yield on the investment will be:

A U.S. MNC is considering investing in Portuguese securities. The exchange rate is € = $1.33. If the euro depreciates, the effective yield on the investment will be:

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Spain and South Africa have very different economic conditions. A MNC would reduce risk by:

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With consignments:

With consignments:

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Question 20 2 pts Skip to question text.

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MORIT, Inc., a U.S. corporation undertakes direct foreign investment in Brazil. The Brazilian real is expected to depreciate temporarily against the dollar. As a result, earnings remitted to MORIT will convert to fewer dollars. For this reason, MORIT may request the subsidiary to:

MORIT, Inc., a U.S. corporation undertakes direct foreign investment in Brazil. The Brazilian real is expected to depreciate temporarily against the dollar. As a result, earnings remitted to MORIT will convert to fewer dollars. For this reason, MORIT may request the subsidiary to:

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Which of the following is probably the most difficult for a MNC to value?

Which of the following is probably the most difficult for a MNC to value?

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Which strategy is suggested when a company wants to to reduce risk by diversifying internationally?

Which strategy is suggested when a company wants to to reduce risk by diversifying internationally?

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The Jackson Corporation, a U.S. firm, establishes a subsidiary in a foreign country where it currently doesn't do any business. The present value of cash flows from this subsidiary to the parent is more sensitive to exchange rate movements when:

The Jackson Corporation, a U.S. firm, establishes a subsidiary in a foreign country where it currently doesn't do any business. The present value of cash flows from this subsidiary to the parent is more sensitive to exchange rate movements when:

Explanation / Answer

Question 1

A company believes that interest rates will increase in the near future and stay at higher levels. This company should borrow at a:

fixed rate, because it will result in lower financing costs

Note : If Company borrow at floating than finance cost would be higher as he believe that in near future interest rate would increase and became constant than interest expenses would be increasing in compare to fixed rate.

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