Question: Theoretically, MNEs should be in a better position than their domestic counterparts to support higher debt ratios because their cash flows are diversified internationally. However,

Theoretically, MNEs should be in a better position than their domestic counterparts to support higher debt ratios because their cash flows are diversified internationally. However, recent empirical studies have come to the opposite conclusion. These studies also concluded that MNEs have higher betas than their domestic counterparts. Discuss.

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