Cloth plc have decided to take-over Trendy Limited, one of the unrelated retailers in the Eurozone which will then be known as Cloth (France). Cloth plc will need to finance substantial improvements before commencing operations as Cloth (France). Required: a) Explain why Cloth plc (the UK-based parent company) might choose to borrow funds in the Eurozone to finance the improvements rather than borrow in the UK. (10 marks) b) Discuss the factors which influence a multinational enterprise (MNE)'s cost of capital and explain whether a MNE's cost of capital is likely to be higher or lower than the cost of capital of a purely domestic company. (20 marks) c) Explain the motives MNEs may have to cross-list their shares and discuss the potential barriers to cross-listing. (20 marks) Cloth plc have decided to take-over Trendy Limited, one of the unrelated retailers in the Eurozone which will then be known as Cloth (France). Cloth plc will need to finance substantial improvements before commencing operations as Cloth (France). Required: a) Explain why Cloth plc (the UK-based parent company) might choose to borrow funds in the Eurozone to finance the improvements rather than borrow in the UK. (10 marks) b) Discuss the factors which influence a multinational enterprise (MNE)'s cost of capital and explain whether a MNE's cost of capital is likely to be higher or lower than the cost of capital of a purely domestic company. (20 marks) c) Explain the motives MNEs may have to cross-list their shares and discuss the potential barriers to cross-listing. (20 marks)