Homework
You will continue building your small MNC. Work on addressing the following questions while continuing developing your small MNC:
1) Describe the financial factors that expose your business to country risk.
2) Describe the political factors that expose your business to country risk.
3) Describe the capital structure that you would use to run your business.
4) Why might the proportion of equity to be used in your business be limited when the business is first created?
5) 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 eight quarters. Which interest rate is typically higher?
6) 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.
7) What is the government's borrowing rate in your target country? Is the rate higher or lower than the government rate in the U.S.? What rate do you think you would have to pay if you borrowed funds in your target country?
Format your homework according to the following formatting requirements:
i) The answer should be typed, using Times New Roman font (size 12), double spaced, with one-inch margins on all sides.
ii) The response also includes a cover page containing the title of the homework, the student's name, the course title, and the date. The cover page is not included in the required page length.
iii) Also include a reference page. The Citations and references must follow APA format. The reference page is not included in the required page length.