Question 1

Other things equal, an increase in the firm's tax rate will increase the WACC for a firm that has both debt and equity financing.

Accepted Answer

A) True 
 B)False

Question 2

Capital market imperfections leading to financial market segmentation include

Accepted Answer

A)  asymmetric information between domestic and foreign-based investors. 
B)  high securities transaction costs. 
C)  foreign exchange risks. 
D)  All of the above. 
A)  asymmetric information between domestic and foreign-based investors. 
B)  high securities transaction costs. 
C)  foreign exchange risks. 
D)  All of the above.

Question 3

International Portfolio constructed of diversified international securities

Accepted Answer

A)  is adding foreign exchange risk to the portfolio and increasing the total risk because the assets are less than perfectly correlated. 
B)  has total return identical to the return of the domestic portfolio. 
C)  is less complex than the domestic portfolio because of less portfolio composition and diversification possibilities. 
D)  None of the above 
A)  is adding foreign exchange risk to the portfolio and increasing the total risk because the assets are less than perfectly correlated. 
B)  has total return identical to the return of the domestic portfolio. 
C)  is less complex than the domestic portfolio because of less portfolio composition and diversification possibilities. 
D)  None of the above

Other things equal, an increase in the firm's tax rate will increase the WACC for a firm that has both debt and equity financing.

Capital market imperfections leading to financial market segmentation include

International Portfolio constructed of diversified international securities

Multinational Financial Management: Opportunities and Challenges

The International Monetary System

The Balance of Payments

Financial Goals and Corporate Governance

The Foreign Exchange Market

International Parity Conditions

Foreign Currency Derivatives and Swaps

Foreign Exchange Rate Determination

Transaction Exposure

Translation Exposure

Operating Exposure

Raising Equity and Debt Globally

Multinational Tax Management

International Trade Finance

Foreign Direct Investment and Political Risk

Multinational Capital Budgeting and Cross-Border Acquisitions

Filters

Exam 12: The Global Cost and Availability of Capital

Other things equal, an increase in the firm's tax rate will increase the WACC for a firm that has both debt and equity financing.

Capital market imperfections leading to financial market segmentation include

International Portfolio constructed of diversified international securities

Multinational Financial Management: Opportunities and Challenges

The International Monetary System

The Balance of Payments

Financial Goals and Corporate Governance

The Foreign Exchange Market

International Parity Conditions

Foreign Currency Derivatives and Swaps

Foreign Exchange Rate Determination

Transaction Exposure

Translation Exposure

Operating Exposure

Raising Equity and Debt Globally

Multinational Tax Management

International Trade Finance

Foreign Direct Investment and Political Risk

Multinational Capital Budgeting and Cross-Border Acquisitions

Filters