problem 1: Describe different factors which find out the extent of political risk?
problem 2: Describe various methods of measuring the country risk.
problem 3: Describe the case of scenario of developing country in terms of political and country risk with appropriate illustrations?
problem 4: Illustrate the process of political risk management and how do you evaluate the economic health of a nation.
problem 5: How economic policies of a nation are influenced by political risk?
problem 6: Illustrate the problems faced in determining the cost of equity capital compared to other securities? In brief describe the approaches to determination of such a cost.
problem 7: The weighted average cost of capital is superior to the marginal cost of capital as a discount rate to assess the capital budgeting of a project. Describe the rationale all along with a suitable ex.
problem 8: If the parent’s cost of capital is 12 %, its equity investment in a subsidiary thus is equivalent to 12 %. Do you agree? If not, describe why not?
problem 9: We should always borrow in a currency that is likely to devalue as it minimizes financial costs. Do you think it is a good rule of thumb? Describe.
problem 10: What factors might cause increase in the cost of capital as the debt or equity ratio rises?
problem 11: What factors must be considered in deciding whether the cost of capital for a foreign affiliate must be higher, lower or the same as the cost of capital for comparable domestic operation?