Q. A firm may incorporate a country risk rating into the capital budgeting analysis by: (Solved)
1. adjusting the NPV upward if the country risk rating has fallen (implying increased risk) below a benchmark level.
2. adjusting the discount rate upward as the country risk rating decreases (implying increased risk).
3. A and B
4. none of the above
- b. adjusting the discount rate upward as the country risk rating decreases (implying increased risk).