Why does the cost of capital for MNCs differ from that of domestic firm?  

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The cost of capital is the rate of return that a company must earn on its investments to maintain or increase its share value. The cost of capital is an important concept in finance because it helps companies evaluate the attractiveness of potential investments and make decisions about how to fund their operations.

Multinational corporations (MNCs) differ from domestic firms in several ways, and as a result, the cost of capital for MNCs can be different from that of domestic firms. Some of the reasons why the cost of capital for MNCs differs from that of domestic firms are:

1. Currency risk: MNCs operate in multiple countries and are exposed to exchange rate fluctuations. This currency risk can affect the cost of capital for MNCs, as investors may require a higher rate of return to compensate for the __ ___ __________ ____________ _____ _________.
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Degree : MASTER DEGREE PROGRAMMES
Course Name : Master in Business Administration
Course Code : MBA
Subject Name : International Financial Management
Subject Code : MMPF 5
Year : 2023