After studying this chapter, you should be able to:
Highlight the importance of financing decisions of MNCs.
Understand the concept and importance of cost of capital.
Define capital structure.
Discuss various methods of financing foreign subsidiaries or projects.
Outline the methods used by MNCs to raise capital.
As discussed in Chapter 9, discount rate plays a crucial role in determining the viability or acceptability of a project. The discount rate is the minimum acceptable rate of return on a project. This minimum acceptable rate is known as the required rate of return (RRR) for the project. Let us consider an example to understand the concept of the required ...