1. What are the components of the weighted average cost of capital (WACC) and how do they differ for an MNE compared to a purely domestic firm? Is the Weighted Average Cost of Capital for MNEs Really Higher than for Their Domestic Counterparts? What do theory and empirical evidence say about capital structure and the cost of capital for MNEs versus their domestic counterparts? Explain.
2. There are four alternative financial instruments for sourcing equity abroad. Identify and explain one of these techniques. In your answer provide a motivation as to why a firm would wish to choose this particular technique for raising equity abroad.