“Running Your Own MNC” – LegitWriting

Address topics covered in chapters 16, 17, & 18.

Chapter 16 Running Your Own MNC

Assessing Exposure to Country Risk

Describe the financial factors that expose your business to country risk.

Describe the political factors that expose your business to country risk.

Chapter 17 Running Your Own MNC

Capital Structure Decisions

Describe the capital structure that you would use to run your business.

Why might the proportion of equity to be used in your business be limited when the business is first created?

Chapter 18 Running Your Own MNC

Long-Term Debt-Denomination Decision

If you planned to borrow long-term funds, you could borrow dollars or you could borrow the foreign currency of

concern. Using the Internet or other sources of data, compare the U.S. interest rate to the foreign interest rate

over the last 8 quarters. Which interest rate is typically higher?

Explain why you might be able to reduce your exposure to exchange rate risk by borrowing long-term funds

denominated in the foreign currency of concern.


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