MNC
Multinational Corporations (MNC's)
There is some debate on whether Multinational Corporations (MNC's) increase risk when borrowing foreign currencies. Those in favor of borrowing state that lower costs of financing can be achieved and it improves their ability to compete. Those against state that when an MNC borrows a foreign currency, they are essentially speculating on future exchange rate movements.
Multinational Corporations (MNC's) have a variety of options in regard to financing new ventures. Some believe that borrowing money in foreign currencies increase exposure to risk while others believe that it can be a beneficial position that lowers the cost of financing. It is reasonable to suspect that both positions have some truth to them and the individual factors that are relevant could be best determined on a case by case basis. A foreign investor entering an unfamiliar environment always faces risks, but there are some countries in which these risks...
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