Umer Khan
NSU ID: N01173174
Case Study: AES
There are many factors to take into account when setting up international business across
different boundaries and countries. Global business always involves risks and regulations that
can affect growth and prosperity. In the case of AES, the complexities of finding consistency in
capital budgeting proved to be an obstacle that caused significant damage and needed to be fixed
in order to prosper. In the past, AES used the same cost of capital for all of its capital budgeting,
but the company’s international expansion raised questions whether a single cost of capital
adequately accounts for the different risks AES faces in its diverse businesses and diverse
