easily access funds by issuing stock. In some countries, shareholder rights are very limited and so the MNCs are less able to raise funds by issuing stock. Explain why access to funding is more severe for MNCs based in countries where shareholder rights are limited. ANSWER: Shareholders may be concerned that the agency problems of the local firms would be very severe, if there are no laws that grant shareholders rights. They will only purchase stock if they have rights that can help them force managers of local firms to serve shareholder interests. Local investors can invest their money in other countries where there are shareholder rights.