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Which of the following statements is true of the types of Foreign Direct Investments (FDI)?
A) In the case of developing nations, more than two-thirds of FDI is in the form of cross-border mergers and acquisitions.
B) FDI flows into developed nations show patterns that are remarkably similar from those into developing nations.
C) Mergers and acquisitions are quicker to execute than greenfield investments.
D) The higher percentage of mergers and acquisitions in developing nations compared to developed nations indicate the low valuation of target firms in developing countries.
E) It is easier and less risky for a firm to build up through a greenfield investment rather than through acquisitions

Respuesta :

Answer:

Correct Answer:

E) It is easier and less risky for a firm to build up through a greenfield investment rather than through acquisitions

Explanation:

In Foreign Direct Investment ( FDI ),the standard model holds that FDI creates direct benefits such as new capital and jobs, which in turn boost government tax revenues and foreign exchange. However, when it involves mergers and acquisitions, there is a possibility of encountering lawsuits, or fraud unlike when a firm build up through a greenfield.

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