6 min read.Updated: 28 Oct 2021, 08:54 PM ISTVikas Vasal
An entity financed through comparatively higher amount of debt as compared to equity is regarded as a thinly capitalized entity
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Multinational entities (MNEs) often borrow funds both externally and internally. This could be in the form of external loans or leveraging internally on the funds available within the group to increase their investments and meet their business requirements. MNEs are generally seen at an advantage vis-à-vis local businesses, due to their access to global debt and equity markets, with varying interest rates and borrowing terms.