Answer:
Exposure to credit risk or interest rate risk.
Step-by-step explanation:
Cost of capital refers to the average cost of equity and debt and this provides an insight into the capital structure of the company. Major factors affecting the cost of capital include;
a. The extent of international diversification: This will impact the possibility of the firm going bankrupt.
b. Access to international capital markets: These multinational companies have more access to reduced costs that stem from foreign financial support.
c. Size of the firm: The larger size of the firms will make these firms get more considerations from creditors.
d. Exposure to country risk: The risk of expansion also might lead to bankruptcy if things are not properly managed.