International corporate finance /
Madura, Jeff.
International corporate finance / Jeff Madura. - Eleventh edition - xxvii, 701 pages : color illustrations, color maps ; 25 cm.
"International student edition"--Cover. Includes index.
Machine generated contents note: pt. 1 The International Financial Environment --
1. Multinational Financial Management: An Overview --
Managing the MNC --
How Business Disciplines Are Used to Manage the MNC --
Agency Problems --
Management Structure of an MNC --
Why Firms Pursue International Business --
Theory of Comparative Advantage --
Imperfect Markets Theory --
Product Cycle Theory --
How Firms Engage in International Business --
International Trade --
Licensing --
Franchising --
Joint Ventures --
Acquisitions of Existing Operations --
Establishing New Foreign Subsidiaries --
Summary of Methods --
Valuation Model for an MNC --
Domestic Model --
Multinational Model --
Valuation of an MNC That Uses Two Currencies --
Valuation of an MNC That Uses Multiple Currencies --
Uncertainty Surrounding an MNC's Cash Flows --
How Uncertainty Affects the MNC's Cost of Capital --
Organization of the Text --
Summary --
Point Counter-Point: Should an MNC Reduce Its Ethical Standards to Compete Internationally? --
Self-Test --
Questions and Applications --
Advanced Questions --
Discussion in the Boardroom --
Running Your Own MNC --
Blades, Inc. Case: Decision to Expand Internationally --
Small Business Dilemma: Developing a Multinational Sporting Goods Corporation --
Internet/Excel Exercises --
Online Articles with Real World Examples --
Term Paper on the International Credit Crisis --
2. International Flow of Funds --
Balance of Payments --
Current Account --
Capital and Financial Accounts --
Growth in International Trade --
Events That Increased Trade Volume --
Impact of Outsourcing on Trade --
Trade Volume among Countries --
Trend in U.S. Balance of Trade --
Factors Affecting International Trade Flows --
Cost of Labor --
Impact of Inflation --
Impact of National Income --
Impact of Government Policies --
Impact of Exchange Rates --
International Capital Flows --
Factors Affecting Direct Foreign Investment --
Factors Affecting International Portfolio Investment --
Impact of International Capital Flows --
Agencies that Facilitate International Flows --
International Monetary Fund --
World Bank --
World Trade Organization --
International Financial Corporation --
International Development Association --
Bank for International Settlements --
OECD --
Regional Development Agencies --
Summary --
Point Counter-Point: Should Trade Restrictions Be Used to Influence Human Rights Issues? --
Self-Test --
Questions and Applications --
Advanced Questions --
Discussion in the Boardroom --
Running Your Own MNC --
Blades, Inc. Case: Exposure to International Flow of Funds --
Small Business Dilemma: Identifying Factors That Will Affect the Foreign Demand at the Sports Exports Company --
Internet/Excel Exercises --
Online Articles with Real World Examples --
3. International Financial Markets --
Foreign Exchange Market --
History of Foreign Exchange --
Foreign Exchange Transactions --
Foreign Exchange Quotations --
Interpreting Foreign Exchange Quotations --
International Money Market --
Origins and Development --
Money Market Interest Rates among Currencies --
International Credit Market --
Regulations in the Credit Market --
Syndicated Loans in the Credit Market --
Impact of the Credit Crisis on the Credit Market --
International Bond Market --
Eurobond Market --
Development of Other Bond Markets --
Risk of International Bonds --
Impact of the Greek Crisis on Bonds --
International Stock Markets --
Issuance of Stock in Foreign Markets --
Issuance of Foreign Stock in the United States --
Non-U.S. Finns Listing on U.S. Exchanges --
Investing in Foreign Stock Markets --
How Financial Markets Serve MNCs --
Summary --
Point Counter-Point: Should Firms That Go Public Engage in International Offerings? --
Self-Test --
Questions and Applications --
Advanced Questions --
Discussion in the Boardroom --
Running Your Own MNC --
Blades, Inc. Case: Decisions to Use International Financial Markets --
Small Business Dilemma: Use of the Foreign Exchange Markets by the Sports Exports Company --
Internet/Excel Exercises --
Online Articles with Real World Examples --
Appendix 3 Investing in International Financial Markets --
4. Exchange Rate Determination --
Measuring Exchange Rate Movements --
Exchange Rate Equilibrium --
Demand for a Currency --
Supply of a Currency for Sale --
Equilibrium --
Factors That Influence Exchange Rates --
Relative Inflation Rates --
Relative Interest Rates --
Relative Income Levels --
Government Controls --
Expectations --
Interaction of Factors --
Influence of Factors across Multiple Currency Markets --
Movements in Cross Exchange Rates --
Explaining Movements in Cross Exchange Rates --
Anticipation of Exchange Rate Movements --
Institutional Speculation Based on Expected Appreciation --
Institutional Speculation Based on Expected Depreciation --
Speculation by Individuals --
The "Carry Trade' --
Summary --
Point Counter-Point: How Can Persistently Weak Currencies Be Stabilized? --
Self-Test --
Questions and Applications --
Advanced Questions --
Discussion in the Boardroom --
Running Your Own MNC --
Blades, Inc. Case: Assessment of Future Exchange Rate Movements --
Small Business Dilemma: Assessment by the Sports Exports Company of Factors That Affect the British Pound's Value --
Internet/Excel Exercises --
Online Articles with Real World Examples --
5. Currency Derivatives --
Forward Market --
How MNCs Use Forward Contracts --
Non-Deliverable Forward Contracts --
Currency Futures Market --
Contract Specifications --
Trading Currency Futures --
Trading Platforms for Currency Futures --
Comparison to Forward Contracts --
Credit Risk of Currency Futures Contracts --
How Firms Use Currency Futures --
Closing Out a Futures Position --
Speculation with Currency Futures --
Currency Options Market --
Option Exchanges --
Over-the-Counter Market --
Currency Call Options --
Factors Affecting Currency Call Option Premiums --
How Firms Use Currency Call Options --
Speculating with Currency Call Options --
Currency Put Options --
Factors Affecting Currency Put Option Premiums --
Hedging with Currency Put Options --
Speculating with Currency Put Options --
Contingency Graph for a Purchaser of a Call Option --
Contingency Graph for a Seller of a Call Option --
Contingency Graph for a Buyer of a Put Option --
Contingency Graph for a Seller of a Put Option --
Conditional Currency Options --
European Currency Options --
Summary --
Point Counter-Point: Should Speculators Use Currency Futures or Options? --
Self-Test --
Questions and Applications --
Advanced Questions --
Discussion in the Boardroom --
Running Your Own MNC --
Blades, Inc. Case: Use of Currency Derivative Instruments --
Small Business Dilemma: Use of Currency Futures and Options by the Sports Exports Company --
Internet/Excel Exercises --
Online Articles with Real World Examples --
Appendix 5A Currency Option Pricing --
Appendix 5B Currency Option Combinations --
pt. 1 Integrative Problem: The International Financial Environment --
pt. 2 Exchange Rate Behavior --
6. Government Influence on Exchange Rates --
Exchange Rate Systems --
Fixed Exchange Rate System --
Freely Floating Exchange Rate System --
Managed Float Exchange Rate System --
Pegged Exchange Rate System --
Dollarization --
A Single European Currency --
Monetary Policy in the Eurozone --
Impact on Firms in the Eurozone --
Impact on Financial Flows in the Eurozone --
Exposure of Countries within the Eurozone --
Government Intervention --
Reasons for Government Intervention --
Direct Intervention --
Indirect Intervention --
Intervention as a Policy Tool --
Influence of a Weak Home Currency --
Influence of a Strong Home Currency --
Summary --
Point Counter-Point: Should China Be Forced to Alter the Value of Its Currency? --
Self-Test --
Questions and Applications --
Advanced Questions --
Discussion in the Boardroom --
Running Your Own MNC --
Blades, Inc. Case: Assessment of Government Influence on Exchange Rates --
Small Business Dilemma: Assessment of Central Bank Intervention by the Sports Exports Company --
Internet/Excel Exercises --
Online Articles with Real World Examples --
Appendix 6 Government Intervention during the Asian Crisis --
7. International Arbitrage and Interest Rate Parity --
International Arbitrage --
Locational Arbitrage --
Triangular Arbitrage --
Covered Interest Arbitrage --
Comparison of Arbitrage Effects --
Interest Rate Parity (IRP) --
Derivation of Interest Rate Parity --
Determining the Forward Premium --
Graphic Analysis of Interest Rate Parity --
How to Test Whether Interest Rate Parity Exists --
Interpretation of Interest Rate Parity --
Does Interest Rate Parity Hold? --
Considerations When Assessing Interest Rate Parity --
Variation in Forward Premiums --
Forward Premiums across Maturities --
Changes in Forward Premiums over Time --
Summary --
Point Counter-Point: Does Arbitrage Destabilize Foreign Exchange Markets? --
Self-Test --
Questions and Applications --
Advanced Questions --
Discussion in the Boardroom --
Running Your Own MNC --
Blades, Inc. Case: Assessment of Potential Arbitrage Opportunities --
Small Business Dilemma: Assessment of Prevailing Spot and Forward Rates by the Sports Exports Company --
Internet/Excel Exercise --
Online Articles with Real World Examples --
8. Relationships Among Inflation, Interest Rates, and Exchange Rates --
Purchasing Power Parity (PPP) --
Interpretations of Purchasing Power Parity --
Rationale behind Relative PPP Theory. Note continued: Derivation of Purchasing Power Parity --
Using PPP to Estimate Exchange Rate Effects --
Graphic Analysis of Purchasing Power Parity --
Testing the Purchasing Power Parity Theory --
Why Purchasing Power Parity Does Not Occur --
International Fisher Effect (IFE) --
Fisher Effect --
Using the IFE to Predict Exchange Rate Movements --
Implications of the International Fisher Effect --
Derivation of the International Fisher Effect --
Graphic Analysis of the International Fisher Effect --
Tests of the International Fisher Effect --
Limitations of the IFE --
IFE Theory versus Reality --
Comparison of the IRP, PPP, and IFE --
Summary --
Point Counter-Point: Does PPP Eliminate Concerns about Long-Term Exchange Rate Risk? --
Self-Test --
Questions and Applications --
Advanced Questions --
Discussion in the Boardroom --
Running Your Own MNC --
Blades, Inc. Case: Assessment of Purchasing Power Parity --
Small Business Dilemma: Assessment of the IFE by the Sports Exports Company --
Internet/Excel Exercises --
Online Articles with Real World Examples --
pt. 2 Integrative Problem: Exchange Rate behavior --
Midterm Self-Exam --
pt. 3 Exchange Rate Risk Management --
9. Forecasting Exchange Rates --
Why Firms Forecast Exchange Rates --
Forecasting Techniques --
Technical Forecasting --
Fundamental Forecasting --
Market-Based Forecasting --
Mixed Forecasting --
Guidelines for Implementing a Forecast --
Forecast Error --
Measurement of Forecast Error --
Forecast Errors among Time Horizons --
Forecast Errors over Time Periods --
Forecast Errors among Currencies --
Forecast Bias --
Graphic Evaluation of Forecast Bias --
Comparison of Forecasting Methods --
Forecasting under Market Efficiency --
Using Interval Forecasts --
Methods of Forecasting Exchange Rate Volatility --
Summary --
Point Counter-Point: Which Exchange Rate Forecast Technique Should MNCs Use? --
Self-Test --
Questions and Applications --
Advanced Questions --
Discussion in the Boardroom --
Running Your Own MNC --
Blades, Inc. Case: Forecasting Exchange Rates --
Small Business Dilemma: Exchange Rate Forecasting by the Sports Exports Company --
Internet/Excel Exercises --
Online Articles with Real World Examples --
10. Measuring Exposure to Exchange Rate Fluctuations --
Relevance of Exchange Rate Risk --
The Investor Hedge Argument --
Currency Diversification Argument --
Stakeholder Diversification Argument --
Response from MNCs --
Transaction Exposure --
Estimating "Net" Cash Fbws in Each Currency --
Exposure of an MNCs Portfolio --
Transaction Exposure Based on Value at Risk --
Economic Exposure --
Exposure to Local Currency Appreciation --
Exposure to Local Currency Depreciation --
Economic Exposure of Domestic Firms --
Measuring Economic Exposure --
Translation Exposure --
Determinants of Translation Exposure --
Exposure of an MNCs Stock Price to Translation Effects --
Summary --
Point Counter-Point: Should Investors Care about an MNCs Translation Exposure? --
Self-Test --
Questions and Applications --
Advanced Questions --
Discussion in the Boardroom --
Running Your Own MNC --
Blades, Inc. Case: Assessment of Exchange Rate Exposure --
Small Business Dilemma: Assessment of Exchange Rate Exposure by the Sports Exports Company --
Internet/Excel Exercises --
Online Articles with Real World Examples --
11. Managing Transaction Exposure --
Policies for Hedging Transaction Exposure --
Hedging Most of the Exposure --
Selective Hedging --
Hedging Exposure to Payables --
Forward or Futures Hedge on Payables --
Money Market Hedge on Payables --
Call Option Hedge on Payables --
Comparison of Techniques to Hedge Payables --
Evaluating the Hedge Decision --
Hedging Exposure to Receivables --
Forward or Futures Hedge on Receivables --
Money Market Hedge on Receivables --
Put Option Hedge on Receivables --
Comparison of Techniques for Hedging Receivables --
Evaluating the Hedge Decision --
Summary of Hedging Techniques --
Limitations of Hedging --
Limitation of Hedging an Uncertain Payment --
Limitation of Repeated Short-Term Hedging --
Alternative Hedging Techniques --
Leading and Lagging --
Cross-Hedging --
Currency Diversification --
Summary --
Point Counter-Point: Should an MNC Risk Overhedging? --
Self-Test --
Questions and Applications --
Advanced Questions --
Discussion in the Boardroom --
Running Your Own MNC --
Blades, Inc. Case: Management of Transaction Exposure --
Small Business Dilemma: Hedging Decisions by the Sports Exports Company --
Internet/Excel Exercises --
Online Articles with Real World Examples --
Appendix 11 Nontraditional Hedging Techniques --
12. Managing Economic Exposure and Translation Exposure --
Managing Economic Exposure --
Assessing Economic Exposure --
Restructuring to Reduce Economic Exposure --
Issues Involved in the Restructuring Decision --
A Case on Hedging Economic Exposure --
Savor Co.'s Dilemma --
Assessment of Economic Exposure --
Assessment of Each Unit's Exposure --
Identifying the Source of the Unit's Exposure --
Possible Strategies to Hedge Economic Exposure --
Savor's Hedging Strategy --
Limitations of Savor's Hedging Strategy --
Hedging Exposure to Fixed Assets --
Managing Translation Exposure --
Hedging with Forward Contracts --
Limitations of Hedging Translation Exposure --
Summary --
Point Counter-Point: Can an MNC Reduce the Impact of Translation Exposure by Communicating? --
Self-Test --
Questions and Applications --
Advanced Questions --
Discussion in the Boardroom --
Running Your Own MNC --
Blades, Inc. Case: Assessment of Economic Exposure --
Small Business Dilemma: Hedging the Sports Exports Company's Economic Exposure to Exchange Rate Risk --
Internet/Excel Exercises --
Online Articles with Real World Examples --
pt. 3 Integrative Problem: Exchange Risk Management --
pt. 4 Long-Term Asset and Liability Management --
13. Direct Foreign Investment --
Motives for Direct Foreign Investment --
Revenue-Related Motives --
Cost-Related Motives --
Comparing Benefits of DFI among Countries --
Measuring an MNCs Benefits of DFI --
Benefits of International Diversification --
Diversification Analysis of International Projects --
Diversification among Countries --
Host Government Views of DFI --
Incentives to Encourage DFI --
Barriers to DFI --
Government-Imposed Conditions to Engage in DFI --
Summary --
Point Counter-Point: Should MNCs Avoid DFI in Countries with Liberal Child Labor Laws? --
Self-Test --
Questions and Applications --
Advanced Questions --
Discussion in the Boardroom --
Running Your Own MNC --
Blades, Inc. Case: Consideration of Direct Foreign Investment --
Small Business Dilemma: Direct Foreign Investment Decision by the Sports Exports Company --
Internet/Excel Exercises --
Online Articles with Real World Examples --
14. Multinational Capital Budgeting --
Subsidiary versus Parent Perspective --
Tax Differential --
Restrictions on Remitted Earnings --
Exchange Rate Movements --
Summary of Factors --
Input for Multinational Capital Budgeting --
Multinational Capital Budgeting Example --
Background --
Analysis --
Other Factors to Consider --
Exchange Rate Fluctuations --
Inflation --
Financing Arrangement --
Blocked Funds --
Uncertain Salvage Value --
Impact of Project on Prevailing Cash Flows --
Host Government Incentives --
Real Options --
Adjusting Project Assessment for Risk --
Risk-Adjusted Discount Rate --
Sensitivity Analysis --
Simulation --
Summary --
Point Counter-Point: Should MNCs Use Forward Rates to Estimate Dollar Cash Flows of Foreign Projects? --
Self-Test --
Questions and Applications --
Advanced Questions --
Discussion in the Boardroom --
Running Your Own MNC --
Blades, Inc. Case: Decision by Blades, Inc., to Invest in Thailand --
Small Business Dilemma: Multinational Capital Budgeting by the Sports Exports Company --
Internet/Excel Exercises --
Online Articles with Real World Examples --
Appendix 14 Incorporating International Tax Law in Multinational Capital Budgeting --
15. International Corporate Governance and Control --
International Corporate Governance --
Governance by Board Members --
Governance by Institutional Investors --
Governance by Shareholder Activists --
International Corporate Control --
Motives for International Acquisitions --
Trends in International Acquisitions --
Barriers to International Corporate Control --
Model for Valuing a Foreign Target --
Factors Affecting Target Valuation --
Target-Specific Factors --
Country-Specific Factors --
Example of the Valuation Process --
International Screening Process --
Estimating the Target's Value --
Changes in Valuation over Time --
Disparity in Foreign Target Valuations --
Expected Cash Flows of the Foreign Target --
Exchange Rate Effects on Remitted Earnings --
Required Return of Acquirer --
Other Corporate Control Decisions --
International Partial Acquisitions --
International Acquisitions of Privatized Businesses --
International Divestitures --
Control Decisions as Real Options --
Call Option on Real Assets --
Put Option on Real Assets --
Summary --
Point Counter-Point: Can a Foreign Target Be Assessed Like Any Other Asset? --
Self-Test --
Questions and Applications --
Advanced Questions --
Discussion in the Boardroom --
Running Your Own MNC --
Blades, Inc. Case: Assessment of an Acquisition in Thailand --
Small Business Dilemma: Multinational Restructuring by the Sports Exports Company --
Internet/Excel Exercises --
Online Articles with Real World Examples. Note continued: 16. Country Risk Analysis --
Country Risk Characteristics --
Political Risk Characteristics --
Financial Risk Characteristics --
Measuring Country Risk --
Techniques to Assess Country Risk --
Deriving a Country Risk Rating --
Comparing Risk Ratings among Countries --
Incorporating Risk in Capital Budgeting --
Adjustment of the Discount Rate --
Adjustment of the Estimated Cash Flows --
Analysis of Existing Projects --
Preventing Host Government Takeovers --
Use a Short-Term Horizon --
Rely on Unique Supplies or Technology --
Hire Local Labor --
Borrow Local Funds --
Purchase Insurance --
Use Project Finance --
Summary --
Point Counter-Point: Does Country Risk Matter for U.S. Projects? --
Self-Test --
Questions and Applications --
Advanced Questions --
Discussion in the Boardroom --
Running Your Own MNC --
Blades, Inc. Case: Country Risk Assessment --
Small Business Dilemma: Country Risk Analysis at the Sports Exports Company --
Internet/Excel Exercise --
Online Articles with Real World Examples --
17. Multinational Capital Structure and Cost of Capital --
Components of Capital --
External Sources of Debt --
External Sources of Equity --
The MNC's Capital Structure Decision --
Influence of Corporate Characteristics --
Influence of Host Country Characteristics --
Response to Changing Country Characteristics --
Subsidiary Versus Parent Capital Structure Decisions --
Impact of Increased Subsidiary Debt Financing --
Impact of Reduced Subsidiary Debt Financing --
Limitations in Offsetting a Subsidiary's Leverage --
Multinational Cost of Capital --
MNC's Cost of Debt --
MNCs Cost of Equity --
Estimating an MNCs Cost of Capital --
Comparing Costs of Debt and Equity --
Cost of Capital for MNCs versus Domestic Firms --
Cost-of-Equity Comparison Using the CAPM --
Cost of Capital across Countries --
Country Differences in the Cost of Debt --
Country Differences in the Cost of Equity --
Summary --
Point Counter-Point: Should a Reduced Tax Rate on Dividends Affect an MNCs Capital Structure? --
Self-Test --
Questions and Applications --
Advanced Questions --
Discussion in the Boardroom --
Running Your Own MNC --
Blades, Inc. Case: Assessment of Cost of Capital --
Small Business Dilemma: Multinational Capital Structure Decision at the Sports Exports Company --
Internet/Excel Exercise --
Online Articles with Real World Examples --
18. Long-Term Debt Financing --
Financing to Match the Inflow Currency --
Using Currency Swaps to Execute the Matching Strategy --
Using Parallel Loans to Execute the Matching Strategy --
Debt Denomination Decision by Subsidiaries --
Debt Decision in Host Countries with High Interest Rates --
Debt Denomination to Finance a Project --
Debt Maturity Decision --
Assessment of Yield Curve --
Financing Costs of Loans with Different Maturities --
Fixed versus Floating Rate Debt Decision --
Financing Costs of Fixed versus Floating Rate Loans --
Hedging Interest Payments with Interest Rate Swaps --
Summary --
Point Counter-Point: Will Currency Swaps Result in Low Financing Costs? --
Self-Test --
Questions and Applications --
Advanced Questions --
Discussion in the Boardroom --
Running Your Own MNC --
Blades, Inc. Case: Use of Long-Term Financing --
Small Business Dilemma: Long-Term Financing Decision by the Sports Exports Company --
Internet/Excel Exercises --
Online Articles with Real World Examples --
pt. 4 Integrative Problem: Long-Term Asset and Liability Management --
pt. 5 Short-Term Asset and Liability Management --
19. Financing International Trade --
Payment Methods for International Trade --
Prepayment --
Letters of Credit (L/Cs) --
Drafts --
Consignment --
Open Account --
Impact of Credit Crisis on the Payment Methods --
Trade Finance Methods --
Accounts Receivable Financing --
Factoring --
Letters of Credit (L/Cs) --
Banker's Acceptance --
Working Capital Financing --
Medium-Term Capital Goods Financing (Forfaiting) --
Countertrade --
Agencies that Motivate International Trade --
Export-Import Bank of the United States --
Private Export Funding Corporation (PEFCO) --
Overseas Private Investment Corporation (OPIC) --
Summary --
Point Counter-Point: Do Agencies That Facilitate International Trade Prevent Free Trade? --
Self-Test --
Questions and Applications --
Advanced Questions --
Discussion in the Boardroom --
Running Your Own MNC --
Blades, Inc. Case: Assessment of International Trade Financing in Thailand --
Small Business Dilemma: Ensuring Payment for Products Exported by the Sports Exports Company --
Internet/Excel Exercise --
Online Articles with Real World Examples --
20. Short-Term Financing --
Sources of Foreign Financing --
Internal Short-Term Financing --
External Short-Term Financing --
Access to Funding during the Credit Crisis --
Financing with a Foreign Currency --
Comparison of Interest Rates among Currencies --
Determining the Effective Financing Rate --
Criteria Considered in the Financing Decision --
Interest Rate Parity --
The Forward Rate as a Forecast --
Exchange Rate Forecasts --
Actual Results from Foreign Financing --
Financing with a Portfolio of Currencies --
Portfolio Diversification Effects --
Repeated Financing with a Currency Portfolio --
Summary --
Point Counter-Point: Do MNCs Increase Their Risk When Borrowing Foreign Currencies? --
Self-Test --
Questions and Applications --
Advanced Questions --
Discussion in the Boardroom --
Running Your Own MNC --
Blades, Inc. Case: Use of Foreign Short-Term Financing --
Small Business Dilemma: Short-Term Financing by the Sports Exports Company --
Internet/Excel Exercises --
Online Articles with Real World Examples --
21. International Cash Management --
Multinational Working Capital Management --
Subsidiary Expenses --
Subsidiary Revenue --
Subsidiary Dividend Payments --
Subsidiary Liquidity Management --
Centralized Cash Management --
Accommodating Cash Shortages --
Optimizing Cash Flows --
Accelerating Cash Inflows --
Minimizing Currency Conversion Costs --
Managing Blocked Funds --
Managing Intersubsidiary Cash Transfers --
Complications in Optimizing Cash Flow --
Investing Excess Cash --
Determining the Effective Yield --
Implications of Interest Rate Parity --
Use of the Forward Rate as a Forecast --
Use of Exchange Rate Forecasts --
Diversifying Cash across Currencies --
Dynamic Hedging --
Summary --
Point Counter-Point: Should Interest Rate Parity Prevent MNCs from Investing in Foreign Currencies? --
Self-Test --
Questions and Applications --
Advanced Questions --
Discussion in the Boardroom --
Running Your Own MNC --
Blades, Inc. Case: International Cash Management --
Small Business Dilemma: Cash Management at the Sports Exports Company --
Internet/Excel Exercises --
Online Articles with Real World Examples --
Appendix 21 Investing in a Portfolio of Currencies --
pt. 5 Integrative Problem: Short-Term Asset and Liability Management --
Final Self-Exam --
Appendix A Answers to Self-Test Questions --
Appendix B Supplemental Cases --
Appendix C Using Excel to Conduct Analysis --
Appendix D International Investing Project --
Appendix E Discussion in the Boardroom.
This edition highlights financial reform and its impact on the international finance today. An emphasis on the most recent financial changes and industry trends further prepares readers to understand and effectively manage within the dynamic field of international finance.
9780538482974 (pbk.) 0538482974 (pbk.)
2007926100
International finance.
Foreign exchange.
Asset-liability management.
Banks and banking, International.
International business enterprises--Finance.
658.1599 / M.J.I
International corporate finance / Jeff Madura. - Eleventh edition - xxvii, 701 pages : color illustrations, color maps ; 25 cm.
"International student edition"--Cover. Includes index.
Machine generated contents note: pt. 1 The International Financial Environment --
1. Multinational Financial Management: An Overview --
Managing the MNC --
How Business Disciplines Are Used to Manage the MNC --
Agency Problems --
Management Structure of an MNC --
Why Firms Pursue International Business --
Theory of Comparative Advantage --
Imperfect Markets Theory --
Product Cycle Theory --
How Firms Engage in International Business --
International Trade --
Licensing --
Franchising --
Joint Ventures --
Acquisitions of Existing Operations --
Establishing New Foreign Subsidiaries --
Summary of Methods --
Valuation Model for an MNC --
Domestic Model --
Multinational Model --
Valuation of an MNC That Uses Two Currencies --
Valuation of an MNC That Uses Multiple Currencies --
Uncertainty Surrounding an MNC's Cash Flows --
How Uncertainty Affects the MNC's Cost of Capital --
Organization of the Text --
Summary --
Point Counter-Point: Should an MNC Reduce Its Ethical Standards to Compete Internationally? --
Self-Test --
Questions and Applications --
Advanced Questions --
Discussion in the Boardroom --
Running Your Own MNC --
Blades, Inc. Case: Decision to Expand Internationally --
Small Business Dilemma: Developing a Multinational Sporting Goods Corporation --
Internet/Excel Exercises --
Online Articles with Real World Examples --
Term Paper on the International Credit Crisis --
2. International Flow of Funds --
Balance of Payments --
Current Account --
Capital and Financial Accounts --
Growth in International Trade --
Events That Increased Trade Volume --
Impact of Outsourcing on Trade --
Trade Volume among Countries --
Trend in U.S. Balance of Trade --
Factors Affecting International Trade Flows --
Cost of Labor --
Impact of Inflation --
Impact of National Income --
Impact of Government Policies --
Impact of Exchange Rates --
International Capital Flows --
Factors Affecting Direct Foreign Investment --
Factors Affecting International Portfolio Investment --
Impact of International Capital Flows --
Agencies that Facilitate International Flows --
International Monetary Fund --
World Bank --
World Trade Organization --
International Financial Corporation --
International Development Association --
Bank for International Settlements --
OECD --
Regional Development Agencies --
Summary --
Point Counter-Point: Should Trade Restrictions Be Used to Influence Human Rights Issues? --
Self-Test --
Questions and Applications --
Advanced Questions --
Discussion in the Boardroom --
Running Your Own MNC --
Blades, Inc. Case: Exposure to International Flow of Funds --
Small Business Dilemma: Identifying Factors That Will Affect the Foreign Demand at the Sports Exports Company --
Internet/Excel Exercises --
Online Articles with Real World Examples --
3. International Financial Markets --
Foreign Exchange Market --
History of Foreign Exchange --
Foreign Exchange Transactions --
Foreign Exchange Quotations --
Interpreting Foreign Exchange Quotations --
International Money Market --
Origins and Development --
Money Market Interest Rates among Currencies --
International Credit Market --
Regulations in the Credit Market --
Syndicated Loans in the Credit Market --
Impact of the Credit Crisis on the Credit Market --
International Bond Market --
Eurobond Market --
Development of Other Bond Markets --
Risk of International Bonds --
Impact of the Greek Crisis on Bonds --
International Stock Markets --
Issuance of Stock in Foreign Markets --
Issuance of Foreign Stock in the United States --
Non-U.S. Finns Listing on U.S. Exchanges --
Investing in Foreign Stock Markets --
How Financial Markets Serve MNCs --
Summary --
Point Counter-Point: Should Firms That Go Public Engage in International Offerings? --
Self-Test --
Questions and Applications --
Advanced Questions --
Discussion in the Boardroom --
Running Your Own MNC --
Blades, Inc. Case: Decisions to Use International Financial Markets --
Small Business Dilemma: Use of the Foreign Exchange Markets by the Sports Exports Company --
Internet/Excel Exercises --
Online Articles with Real World Examples --
Appendix 3 Investing in International Financial Markets --
4. Exchange Rate Determination --
Measuring Exchange Rate Movements --
Exchange Rate Equilibrium --
Demand for a Currency --
Supply of a Currency for Sale --
Equilibrium --
Factors That Influence Exchange Rates --
Relative Inflation Rates --
Relative Interest Rates --
Relative Income Levels --
Government Controls --
Expectations --
Interaction of Factors --
Influence of Factors across Multiple Currency Markets --
Movements in Cross Exchange Rates --
Explaining Movements in Cross Exchange Rates --
Anticipation of Exchange Rate Movements --
Institutional Speculation Based on Expected Appreciation --
Institutional Speculation Based on Expected Depreciation --
Speculation by Individuals --
The "Carry Trade' --
Summary --
Point Counter-Point: How Can Persistently Weak Currencies Be Stabilized? --
Self-Test --
Questions and Applications --
Advanced Questions --
Discussion in the Boardroom --
Running Your Own MNC --
Blades, Inc. Case: Assessment of Future Exchange Rate Movements --
Small Business Dilemma: Assessment by the Sports Exports Company of Factors That Affect the British Pound's Value --
Internet/Excel Exercises --
Online Articles with Real World Examples --
5. Currency Derivatives --
Forward Market --
How MNCs Use Forward Contracts --
Non-Deliverable Forward Contracts --
Currency Futures Market --
Contract Specifications --
Trading Currency Futures --
Trading Platforms for Currency Futures --
Comparison to Forward Contracts --
Credit Risk of Currency Futures Contracts --
How Firms Use Currency Futures --
Closing Out a Futures Position --
Speculation with Currency Futures --
Currency Options Market --
Option Exchanges --
Over-the-Counter Market --
Currency Call Options --
Factors Affecting Currency Call Option Premiums --
How Firms Use Currency Call Options --
Speculating with Currency Call Options --
Currency Put Options --
Factors Affecting Currency Put Option Premiums --
Hedging with Currency Put Options --
Speculating with Currency Put Options --
Contingency Graph for a Purchaser of a Call Option --
Contingency Graph for a Seller of a Call Option --
Contingency Graph for a Buyer of a Put Option --
Contingency Graph for a Seller of a Put Option --
Conditional Currency Options --
European Currency Options --
Summary --
Point Counter-Point: Should Speculators Use Currency Futures or Options? --
Self-Test --
Questions and Applications --
Advanced Questions --
Discussion in the Boardroom --
Running Your Own MNC --
Blades, Inc. Case: Use of Currency Derivative Instruments --
Small Business Dilemma: Use of Currency Futures and Options by the Sports Exports Company --
Internet/Excel Exercises --
Online Articles with Real World Examples --
Appendix 5A Currency Option Pricing --
Appendix 5B Currency Option Combinations --
pt. 1 Integrative Problem: The International Financial Environment --
pt. 2 Exchange Rate Behavior --
6. Government Influence on Exchange Rates --
Exchange Rate Systems --
Fixed Exchange Rate System --
Freely Floating Exchange Rate System --
Managed Float Exchange Rate System --
Pegged Exchange Rate System --
Dollarization --
A Single European Currency --
Monetary Policy in the Eurozone --
Impact on Firms in the Eurozone --
Impact on Financial Flows in the Eurozone --
Exposure of Countries within the Eurozone --
Government Intervention --
Reasons for Government Intervention --
Direct Intervention --
Indirect Intervention --
Intervention as a Policy Tool --
Influence of a Weak Home Currency --
Influence of a Strong Home Currency --
Summary --
Point Counter-Point: Should China Be Forced to Alter the Value of Its Currency? --
Self-Test --
Questions and Applications --
Advanced Questions --
Discussion in the Boardroom --
Running Your Own MNC --
Blades, Inc. Case: Assessment of Government Influence on Exchange Rates --
Small Business Dilemma: Assessment of Central Bank Intervention by the Sports Exports Company --
Internet/Excel Exercises --
Online Articles with Real World Examples --
Appendix 6 Government Intervention during the Asian Crisis --
7. International Arbitrage and Interest Rate Parity --
International Arbitrage --
Locational Arbitrage --
Triangular Arbitrage --
Covered Interest Arbitrage --
Comparison of Arbitrage Effects --
Interest Rate Parity (IRP) --
Derivation of Interest Rate Parity --
Determining the Forward Premium --
Graphic Analysis of Interest Rate Parity --
How to Test Whether Interest Rate Parity Exists --
Interpretation of Interest Rate Parity --
Does Interest Rate Parity Hold? --
Considerations When Assessing Interest Rate Parity --
Variation in Forward Premiums --
Forward Premiums across Maturities --
Changes in Forward Premiums over Time --
Summary --
Point Counter-Point: Does Arbitrage Destabilize Foreign Exchange Markets? --
Self-Test --
Questions and Applications --
Advanced Questions --
Discussion in the Boardroom --
Running Your Own MNC --
Blades, Inc. Case: Assessment of Potential Arbitrage Opportunities --
Small Business Dilemma: Assessment of Prevailing Spot and Forward Rates by the Sports Exports Company --
Internet/Excel Exercise --
Online Articles with Real World Examples --
8. Relationships Among Inflation, Interest Rates, and Exchange Rates --
Purchasing Power Parity (PPP) --
Interpretations of Purchasing Power Parity --
Rationale behind Relative PPP Theory. Note continued: Derivation of Purchasing Power Parity --
Using PPP to Estimate Exchange Rate Effects --
Graphic Analysis of Purchasing Power Parity --
Testing the Purchasing Power Parity Theory --
Why Purchasing Power Parity Does Not Occur --
International Fisher Effect (IFE) --
Fisher Effect --
Using the IFE to Predict Exchange Rate Movements --
Implications of the International Fisher Effect --
Derivation of the International Fisher Effect --
Graphic Analysis of the International Fisher Effect --
Tests of the International Fisher Effect --
Limitations of the IFE --
IFE Theory versus Reality --
Comparison of the IRP, PPP, and IFE --
Summary --
Point Counter-Point: Does PPP Eliminate Concerns about Long-Term Exchange Rate Risk? --
Self-Test --
Questions and Applications --
Advanced Questions --
Discussion in the Boardroom --
Running Your Own MNC --
Blades, Inc. Case: Assessment of Purchasing Power Parity --
Small Business Dilemma: Assessment of the IFE by the Sports Exports Company --
Internet/Excel Exercises --
Online Articles with Real World Examples --
pt. 2 Integrative Problem: Exchange Rate behavior --
Midterm Self-Exam --
pt. 3 Exchange Rate Risk Management --
9. Forecasting Exchange Rates --
Why Firms Forecast Exchange Rates --
Forecasting Techniques --
Technical Forecasting --
Fundamental Forecasting --
Market-Based Forecasting --
Mixed Forecasting --
Guidelines for Implementing a Forecast --
Forecast Error --
Measurement of Forecast Error --
Forecast Errors among Time Horizons --
Forecast Errors over Time Periods --
Forecast Errors among Currencies --
Forecast Bias --
Graphic Evaluation of Forecast Bias --
Comparison of Forecasting Methods --
Forecasting under Market Efficiency --
Using Interval Forecasts --
Methods of Forecasting Exchange Rate Volatility --
Summary --
Point Counter-Point: Which Exchange Rate Forecast Technique Should MNCs Use? --
Self-Test --
Questions and Applications --
Advanced Questions --
Discussion in the Boardroom --
Running Your Own MNC --
Blades, Inc. Case: Forecasting Exchange Rates --
Small Business Dilemma: Exchange Rate Forecasting by the Sports Exports Company --
Internet/Excel Exercises --
Online Articles with Real World Examples --
10. Measuring Exposure to Exchange Rate Fluctuations --
Relevance of Exchange Rate Risk --
The Investor Hedge Argument --
Currency Diversification Argument --
Stakeholder Diversification Argument --
Response from MNCs --
Transaction Exposure --
Estimating "Net" Cash Fbws in Each Currency --
Exposure of an MNCs Portfolio --
Transaction Exposure Based on Value at Risk --
Economic Exposure --
Exposure to Local Currency Appreciation --
Exposure to Local Currency Depreciation --
Economic Exposure of Domestic Firms --
Measuring Economic Exposure --
Translation Exposure --
Determinants of Translation Exposure --
Exposure of an MNCs Stock Price to Translation Effects --
Summary --
Point Counter-Point: Should Investors Care about an MNCs Translation Exposure? --
Self-Test --
Questions and Applications --
Advanced Questions --
Discussion in the Boardroom --
Running Your Own MNC --
Blades, Inc. Case: Assessment of Exchange Rate Exposure --
Small Business Dilemma: Assessment of Exchange Rate Exposure by the Sports Exports Company --
Internet/Excel Exercises --
Online Articles with Real World Examples --
11. Managing Transaction Exposure --
Policies for Hedging Transaction Exposure --
Hedging Most of the Exposure --
Selective Hedging --
Hedging Exposure to Payables --
Forward or Futures Hedge on Payables --
Money Market Hedge on Payables --
Call Option Hedge on Payables --
Comparison of Techniques to Hedge Payables --
Evaluating the Hedge Decision --
Hedging Exposure to Receivables --
Forward or Futures Hedge on Receivables --
Money Market Hedge on Receivables --
Put Option Hedge on Receivables --
Comparison of Techniques for Hedging Receivables --
Evaluating the Hedge Decision --
Summary of Hedging Techniques --
Limitations of Hedging --
Limitation of Hedging an Uncertain Payment --
Limitation of Repeated Short-Term Hedging --
Alternative Hedging Techniques --
Leading and Lagging --
Cross-Hedging --
Currency Diversification --
Summary --
Point Counter-Point: Should an MNC Risk Overhedging? --
Self-Test --
Questions and Applications --
Advanced Questions --
Discussion in the Boardroom --
Running Your Own MNC --
Blades, Inc. Case: Management of Transaction Exposure --
Small Business Dilemma: Hedging Decisions by the Sports Exports Company --
Internet/Excel Exercises --
Online Articles with Real World Examples --
Appendix 11 Nontraditional Hedging Techniques --
12. Managing Economic Exposure and Translation Exposure --
Managing Economic Exposure --
Assessing Economic Exposure --
Restructuring to Reduce Economic Exposure --
Issues Involved in the Restructuring Decision --
A Case on Hedging Economic Exposure --
Savor Co.'s Dilemma --
Assessment of Economic Exposure --
Assessment of Each Unit's Exposure --
Identifying the Source of the Unit's Exposure --
Possible Strategies to Hedge Economic Exposure --
Savor's Hedging Strategy --
Limitations of Savor's Hedging Strategy --
Hedging Exposure to Fixed Assets --
Managing Translation Exposure --
Hedging with Forward Contracts --
Limitations of Hedging Translation Exposure --
Summary --
Point Counter-Point: Can an MNC Reduce the Impact of Translation Exposure by Communicating? --
Self-Test --
Questions and Applications --
Advanced Questions --
Discussion in the Boardroom --
Running Your Own MNC --
Blades, Inc. Case: Assessment of Economic Exposure --
Small Business Dilemma: Hedging the Sports Exports Company's Economic Exposure to Exchange Rate Risk --
Internet/Excel Exercises --
Online Articles with Real World Examples --
pt. 3 Integrative Problem: Exchange Risk Management --
pt. 4 Long-Term Asset and Liability Management --
13. Direct Foreign Investment --
Motives for Direct Foreign Investment --
Revenue-Related Motives --
Cost-Related Motives --
Comparing Benefits of DFI among Countries --
Measuring an MNCs Benefits of DFI --
Benefits of International Diversification --
Diversification Analysis of International Projects --
Diversification among Countries --
Host Government Views of DFI --
Incentives to Encourage DFI --
Barriers to DFI --
Government-Imposed Conditions to Engage in DFI --
Summary --
Point Counter-Point: Should MNCs Avoid DFI in Countries with Liberal Child Labor Laws? --
Self-Test --
Questions and Applications --
Advanced Questions --
Discussion in the Boardroom --
Running Your Own MNC --
Blades, Inc. Case: Consideration of Direct Foreign Investment --
Small Business Dilemma: Direct Foreign Investment Decision by the Sports Exports Company --
Internet/Excel Exercises --
Online Articles with Real World Examples --
14. Multinational Capital Budgeting --
Subsidiary versus Parent Perspective --
Tax Differential --
Restrictions on Remitted Earnings --
Exchange Rate Movements --
Summary of Factors --
Input for Multinational Capital Budgeting --
Multinational Capital Budgeting Example --
Background --
Analysis --
Other Factors to Consider --
Exchange Rate Fluctuations --
Inflation --
Financing Arrangement --
Blocked Funds --
Uncertain Salvage Value --
Impact of Project on Prevailing Cash Flows --
Host Government Incentives --
Real Options --
Adjusting Project Assessment for Risk --
Risk-Adjusted Discount Rate --
Sensitivity Analysis --
Simulation --
Summary --
Point Counter-Point: Should MNCs Use Forward Rates to Estimate Dollar Cash Flows of Foreign Projects? --
Self-Test --
Questions and Applications --
Advanced Questions --
Discussion in the Boardroom --
Running Your Own MNC --
Blades, Inc. Case: Decision by Blades, Inc., to Invest in Thailand --
Small Business Dilemma: Multinational Capital Budgeting by the Sports Exports Company --
Internet/Excel Exercises --
Online Articles with Real World Examples --
Appendix 14 Incorporating International Tax Law in Multinational Capital Budgeting --
15. International Corporate Governance and Control --
International Corporate Governance --
Governance by Board Members --
Governance by Institutional Investors --
Governance by Shareholder Activists --
International Corporate Control --
Motives for International Acquisitions --
Trends in International Acquisitions --
Barriers to International Corporate Control --
Model for Valuing a Foreign Target --
Factors Affecting Target Valuation --
Target-Specific Factors --
Country-Specific Factors --
Example of the Valuation Process --
International Screening Process --
Estimating the Target's Value --
Changes in Valuation over Time --
Disparity in Foreign Target Valuations --
Expected Cash Flows of the Foreign Target --
Exchange Rate Effects on Remitted Earnings --
Required Return of Acquirer --
Other Corporate Control Decisions --
International Partial Acquisitions --
International Acquisitions of Privatized Businesses --
International Divestitures --
Control Decisions as Real Options --
Call Option on Real Assets --
Put Option on Real Assets --
Summary --
Point Counter-Point: Can a Foreign Target Be Assessed Like Any Other Asset? --
Self-Test --
Questions and Applications --
Advanced Questions --
Discussion in the Boardroom --
Running Your Own MNC --
Blades, Inc. Case: Assessment of an Acquisition in Thailand --
Small Business Dilemma: Multinational Restructuring by the Sports Exports Company --
Internet/Excel Exercises --
Online Articles with Real World Examples. Note continued: 16. Country Risk Analysis --
Country Risk Characteristics --
Political Risk Characteristics --
Financial Risk Characteristics --
Measuring Country Risk --
Techniques to Assess Country Risk --
Deriving a Country Risk Rating --
Comparing Risk Ratings among Countries --
Incorporating Risk in Capital Budgeting --
Adjustment of the Discount Rate --
Adjustment of the Estimated Cash Flows --
Analysis of Existing Projects --
Preventing Host Government Takeovers --
Use a Short-Term Horizon --
Rely on Unique Supplies or Technology --
Hire Local Labor --
Borrow Local Funds --
Purchase Insurance --
Use Project Finance --
Summary --
Point Counter-Point: Does Country Risk Matter for U.S. Projects? --
Self-Test --
Questions and Applications --
Advanced Questions --
Discussion in the Boardroom --
Running Your Own MNC --
Blades, Inc. Case: Country Risk Assessment --
Small Business Dilemma: Country Risk Analysis at the Sports Exports Company --
Internet/Excel Exercise --
Online Articles with Real World Examples --
17. Multinational Capital Structure and Cost of Capital --
Components of Capital --
External Sources of Debt --
External Sources of Equity --
The MNC's Capital Structure Decision --
Influence of Corporate Characteristics --
Influence of Host Country Characteristics --
Response to Changing Country Characteristics --
Subsidiary Versus Parent Capital Structure Decisions --
Impact of Increased Subsidiary Debt Financing --
Impact of Reduced Subsidiary Debt Financing --
Limitations in Offsetting a Subsidiary's Leverage --
Multinational Cost of Capital --
MNC's Cost of Debt --
MNCs Cost of Equity --
Estimating an MNCs Cost of Capital --
Comparing Costs of Debt and Equity --
Cost of Capital for MNCs versus Domestic Firms --
Cost-of-Equity Comparison Using the CAPM --
Cost of Capital across Countries --
Country Differences in the Cost of Debt --
Country Differences in the Cost of Equity --
Summary --
Point Counter-Point: Should a Reduced Tax Rate on Dividends Affect an MNCs Capital Structure? --
Self-Test --
Questions and Applications --
Advanced Questions --
Discussion in the Boardroom --
Running Your Own MNC --
Blades, Inc. Case: Assessment of Cost of Capital --
Small Business Dilemma: Multinational Capital Structure Decision at the Sports Exports Company --
Internet/Excel Exercise --
Online Articles with Real World Examples --
18. Long-Term Debt Financing --
Financing to Match the Inflow Currency --
Using Currency Swaps to Execute the Matching Strategy --
Using Parallel Loans to Execute the Matching Strategy --
Debt Denomination Decision by Subsidiaries --
Debt Decision in Host Countries with High Interest Rates --
Debt Denomination to Finance a Project --
Debt Maturity Decision --
Assessment of Yield Curve --
Financing Costs of Loans with Different Maturities --
Fixed versus Floating Rate Debt Decision --
Financing Costs of Fixed versus Floating Rate Loans --
Hedging Interest Payments with Interest Rate Swaps --
Summary --
Point Counter-Point: Will Currency Swaps Result in Low Financing Costs? --
Self-Test --
Questions and Applications --
Advanced Questions --
Discussion in the Boardroom --
Running Your Own MNC --
Blades, Inc. Case: Use of Long-Term Financing --
Small Business Dilemma: Long-Term Financing Decision by the Sports Exports Company --
Internet/Excel Exercises --
Online Articles with Real World Examples --
pt. 4 Integrative Problem: Long-Term Asset and Liability Management --
pt. 5 Short-Term Asset and Liability Management --
19. Financing International Trade --
Payment Methods for International Trade --
Prepayment --
Letters of Credit (L/Cs) --
Drafts --
Consignment --
Open Account --
Impact of Credit Crisis on the Payment Methods --
Trade Finance Methods --
Accounts Receivable Financing --
Factoring --
Letters of Credit (L/Cs) --
Banker's Acceptance --
Working Capital Financing --
Medium-Term Capital Goods Financing (Forfaiting) --
Countertrade --
Agencies that Motivate International Trade --
Export-Import Bank of the United States --
Private Export Funding Corporation (PEFCO) --
Overseas Private Investment Corporation (OPIC) --
Summary --
Point Counter-Point: Do Agencies That Facilitate International Trade Prevent Free Trade? --
Self-Test --
Questions and Applications --
Advanced Questions --
Discussion in the Boardroom --
Running Your Own MNC --
Blades, Inc. Case: Assessment of International Trade Financing in Thailand --
Small Business Dilemma: Ensuring Payment for Products Exported by the Sports Exports Company --
Internet/Excel Exercise --
Online Articles with Real World Examples --
20. Short-Term Financing --
Sources of Foreign Financing --
Internal Short-Term Financing --
External Short-Term Financing --
Access to Funding during the Credit Crisis --
Financing with a Foreign Currency --
Comparison of Interest Rates among Currencies --
Determining the Effective Financing Rate --
Criteria Considered in the Financing Decision --
Interest Rate Parity --
The Forward Rate as a Forecast --
Exchange Rate Forecasts --
Actual Results from Foreign Financing --
Financing with a Portfolio of Currencies --
Portfolio Diversification Effects --
Repeated Financing with a Currency Portfolio --
Summary --
Point Counter-Point: Do MNCs Increase Their Risk When Borrowing Foreign Currencies? --
Self-Test --
Questions and Applications --
Advanced Questions --
Discussion in the Boardroom --
Running Your Own MNC --
Blades, Inc. Case: Use of Foreign Short-Term Financing --
Small Business Dilemma: Short-Term Financing by the Sports Exports Company --
Internet/Excel Exercises --
Online Articles with Real World Examples --
21. International Cash Management --
Multinational Working Capital Management --
Subsidiary Expenses --
Subsidiary Revenue --
Subsidiary Dividend Payments --
Subsidiary Liquidity Management --
Centralized Cash Management --
Accommodating Cash Shortages --
Optimizing Cash Flows --
Accelerating Cash Inflows --
Minimizing Currency Conversion Costs --
Managing Blocked Funds --
Managing Intersubsidiary Cash Transfers --
Complications in Optimizing Cash Flow --
Investing Excess Cash --
Determining the Effective Yield --
Implications of Interest Rate Parity --
Use of the Forward Rate as a Forecast --
Use of Exchange Rate Forecasts --
Diversifying Cash across Currencies --
Dynamic Hedging --
Summary --
Point Counter-Point: Should Interest Rate Parity Prevent MNCs from Investing in Foreign Currencies? --
Self-Test --
Questions and Applications --
Advanced Questions --
Discussion in the Boardroom --
Running Your Own MNC --
Blades, Inc. Case: International Cash Management --
Small Business Dilemma: Cash Management at the Sports Exports Company --
Internet/Excel Exercises --
Online Articles with Real World Examples --
Appendix 21 Investing in a Portfolio of Currencies --
pt. 5 Integrative Problem: Short-Term Asset and Liability Management --
Final Self-Exam --
Appendix A Answers to Self-Test Questions --
Appendix B Supplemental Cases --
Appendix C Using Excel to Conduct Analysis --
Appendix D International Investing Project --
Appendix E Discussion in the Boardroom.
This edition highlights financial reform and its impact on the international finance today. An emphasis on the most recent financial changes and industry trends further prepares readers to understand and effectively manage within the dynamic field of international finance.
9780538482974 (pbk.) 0538482974 (pbk.)
2007926100
International finance.
Foreign exchange.
Asset-liability management.
Banks and banking, International.
International business enterprises--Finance.
658.1599 / M.J.I