Is the cost of Capital lower for MNE's compared to domestic firms?

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Clarification of Question by ad11-ga on 19 Apr 2005 10:31 PDT

Please consider all factors concering costs of acquiring capital (both
debt and equity), for exapmle, share issue, bank loans, tax factors
etc.

A search on google for 

"cost of Capital" mne "domestic"

yeilded the following:

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According to:
http://flash.lakeheadu.ca/~pgreg/assignments/4079chapter11n.pdf

Agency costs, political and foreign exchange risks, however, are
higher for MNEs.

MNE?s Cost of Capital Compared to Domestic Firms
Recent empirical studies have shown that
² U.S.-based MNEs? WACC is generally higher than their
domestic counterparts.
² U.S.-based MNEs? debt ratios are lower than their domestic
counterparts.
² U.S.-based MNEs? have higher systematic risk than their
domestic counterparts.

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From 
http://www.lancs.ac.uk/staff/ecarar/ib%20lecture%205.ppt

Given imperfect world financial markets, MNEs arbitrage by borrowing
money at low interest rates in capita-rich countries for use in
capital-poor countries which have higher interest rates. MNEs
therefore have access to cheaper capital than domestic firms in
host-countries.

and

MNE activities are a geographically-diversified portfolio of
income-earning assets. Their shareholders possess a diversified
portfolio of international securities. MNE equity provides a
relatively high rate of return for a low risk compared with local
(domestic) firms.

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http://www.lib.unb.ca/Texts/CJRS/bin/get.cgi?directory=Summer98/&filename=forsans.htm

Research confirms that the internationally diversified firm typically
exhibits superior performance (or lower risk) linked to the degree of
multinationality, and is able to enjoy a lower cost of capital
compared with non-diversified firms, on account of its attractiveness
to wealth holders (Clegg 1992).


AC