CHAPTER 11

Financing Decisions of MNCs

CHAPTER OBJECTIVES

After studying this chapter, you should be able to:

  1. Highlight the importance of financing decisions of MNCs.
  2. Understand the concept of cost of capital.
  3. Appreciate the importance of cost of capital in project selection.
  4. Define capital structure.
  5. Identify the factors that influence the capital structure.
  6. Discuss various methods of financing foreign subsidiaries or projects.
  7. Outline the methods used by MNCs to raise capital.

Introduction

As discussed in Chapter 10, 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 ...

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