1. i) What happens to the cost of equity and to the cost of debt of a multinational company, when the risk free of the country it operates in increases?

1. they both increase
2. they both decrease
3. cost of equity increases, cost of debt decreases
4. cost of debt increases, cost of equity decreases

Ii) How is NPV effected if the risk-free rate of the country it operates in decreases?

1. NPV increases
2. NPV decreases
3. NPV stays the same