Explain in detail the advantages and potential limitations that a Multinational Firm has over a purely domestic firm in the ability to raise finance on international stock exchanges and international debt markets

Advantages of multinational company over domestic company-

A. Multinational company have better economies of scale and it will help them in order to lowering the cost of capital.

B. Multinational company will also have higher advantage in respect of raising funds from different countries.

C. Multinational companies will also have advantage in form of higher level of diversification internationally.

D. Multinational companies are also having advantage in respect of mergers and acquisitions across different nations which will help them in order to have a higher degree of core competency and market share.

Disadvantage related to multinational companies are as follows-

A. Multinational companies are additionally exposed to the rules and regulations of different nations.

B. Multinational companies are also exposed to the risk associated with the political changes in different countries.

C. Multinational corporations are also exposed to the discussion associated with exchange rate risk and it will lead to transaction and translation exposure.

D. Multinational company will also include a higher amount of cost in set up businesses in different countries.