$V={\displaystyle \underset{t=1}{\overset{n}{}}}(\frac{{\displaystyle \underset{j=1}{\overset{m}{}}}E(C{F}_{j,t})E(S_{j,t})}{(1+k{)}^t})$

where

$t$ represents an individual time period

$n$ represents the number of future time periods in which cash flows will be received

$j$ represents an individual currency

$n$ represents the number of currencies in each time period

$E(C{F}_{j,t})$ represents the expected cash flow received at the end of time period $t,$ denoted in currency $j$

$E(S_{j,t})$ represents the expected exchange rate for currency $j$ in time period $t$

$k$ is the required rate of return, representing the weighted cost of capital to the firm.

Consider a U$.$S$.-$based MNC parent owns subsidiaries in the France, Mexico, and Australia. Suppose that recent investment decisions by the MNC parent in its local businesses has caused the cost of capital in Australia to decrease.

This decrease in the forecasted cost of capital will $$ the value $(V)$ of the MNC$,$ all else equal.