Impact of uncertainty on an mnc valuation

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Impact of Uncertainty on an MNC's Valuation Assume that Alpine Co. is a U.S. firm that has direct foreign investment in Brazil as a result establishing a subsidiary there. Political conditions have changed in Brazil, but the best guess by investors of the future cash flows per year for Alpine Co. has not changed. Yet, there is more uncertainty surrounding the best guess of Alpine's cash flows. In other words, the distribution of possible outcomes above and below the best guess has expanded. Would the change in uncertainty cause the prevailing value of Alpine Co. to increase, decrease, or remain unchanged? Briefly explain.

Reference no: EM131043011

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