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International Financial Management Exam Questions with Verified Answers (Already Passed) Rated A+

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  • International Financial Management
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  • International Financial Management

International Financial Management Exam Questions with Verified Answers (Already Passed) Rated A+ what is the total cost under FDI - Answers TC = F + cq, where F = fixed cost and c = variable costs what is the total cost under exporting - Answers TC = (c + t)q, where c = variable costs and t = ...

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  • December 3, 2024
  • 10
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers
  • International Financial Management
  • International Financial Management
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International Financial Management Exam Questionas with Verified Answers (Already Passed) Rated
A+



what is the total cost under FDI - Answers TC = F + cq, where F = fixed cost and c = variable costs

what is the total cost under exporting - Answers TC = (c + t)q, where c = variable costs and t = tariff

M&M Proposition is the theory that the:

a.

value of a firm depends upon the firm's capital structure.

b.

value of a firm is independent of its capital structure.

c.

capital structure is highly relevant to the value of a firm. - Answers value of a firm is independent of its
capital structure.

The pecking-order theory is based on the idea of asymmetric information between firms and suppliers of
capital. - Answers True

The following is not one the factors which should be considered when analysing the capital structure
policy of a MNC?



a. Expectations of international portfolio investors



b.

Availability of capital

c.

Diversification of cash flows

d.

Pecking volatility

e.

, Foreign exchange risk - Answers Pecking volatility

Usually bank loans is a more important financing source for firms in Germany than for firms in US. -
Answers True

IPO underpricing phenomenon is consistent with asymmetric information ideas. - Answers True

Sukuks are similar to conventional bonds with the difference that these are usually asset backed and
represent proportionate beneficial ownership in the underlying asset. - Answers True

The largest level of IPO underpricing is observed in: - Answers China

Japanese and German banks hold substantial equity stakes in commercial firms. - Answers True

The following is not one of the ways a multinational bank can increase its capital ratio



Reduce deposit growth



b.

Retire bonds and other debts

c.

Call back loans

d.

Reduce dividends

e.

Repurchase stocks - Answers Repurchase stocks

The cost of equity for MNC is defined as the:

Question 3 Answera.

next year's dividend divided by the current stock price

b.

firm's weighted average cost of capital multiplied by the firm's beta

c.

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