{"product_id":"multinational-financial-management-9781119668855","title":"Multinational Financial Management","description":"\u003cb\u003eBook Synopsis\u003c\/b\u003e\u003cbr\u003e\u003cbr\u003e\u003cbr\u003e\u003cb\u003eTable of Contents\u003c\/b\u003e\u003cbr\u003e\u003cp\u003eList of Figures xix\u003c\/p\u003e \u003cp\u003eList of Tables xxiii\u003c\/p\u003e \u003cp\u003ePreface xxvii\u003c\/p\u003e \u003cp\u003eWorld Currencies and Symbols xxxi\u003c\/p\u003e \u003cp\u003eAcronyms and Symbols xxxv\u003c\/p\u003e \u003cp\u003e\u003cstrong style=\"box-sizing: border-box;\"\u003ePart I The International Financial Management Environment\u003c\/strong\u003e\u003c\/p\u003e \u003cp\u003e\u003cstrong style=\"box-sizing: border-box;\"\u003e1 Introduction: Multinational Corporations and Financial Management 3\u003c\/strong\u003e\u003c\/p\u003e \u003cp\u003e1.1 The Rise of the Multinational Corporation 4\u003c\/p\u003e \u003cp\u003e1.1.1 Evolution of the Multinational Corporation 7\u003c\/p\u003e \u003cp\u003e1.1.2 The Process of Overseas Expansion by Multinationals 14\u003c\/p\u003e \u003cp\u003e1.1.3 A Behavioral Definition of the Multinational Corporation 17\u003c\/p\u003e \u003cp\u003e1.1.4 The Global Manager 18\u003c\/p\u003e \u003cp\u003e1.2 The Internationalization of Business and Finance 18\u003c\/p\u003e \u003cp\u003e1.2.1 Political and Labor Union Concerns About Global Competition 19\u003c\/p\u003e \u003cp\u003e1.2.2 Consequences of Global Competition 22\u003c\/p\u003e \u003cp\u003e1.3 Multinational Financial Management: Theory and Practice 24\u003c\/p\u003e \u003cp\u003e1.3.1 Functions of Financial Management 25\u003c\/p\u003e \u003cp\u003e1.3.2 Theme of This Book 25\u003c\/p\u003e \u003cp\u003e1.3.3 Relationship to Domestic Financial Management 26\u003c\/p\u003e \u003cp\u003e1.3.4 The Global Financial Marketplace 28\u003c\/p\u003e \u003cp\u003e1.3.5 The Role of the Financial Executive in an Efficient Market 28\u003c\/p\u003e \u003cp\u003e1.4 Outline of the Book 29\u003c\/p\u003e \u003cp\u003e1.4.1 The International Financial Management Environment 29\u003c\/p\u003e \u003cp\u003e1.4.2 The Foreign Exchange and Derivatives Markets 29\u003c\/p\u003e \u003cp\u003e1.4.3 Foreign Exchange Risk Management 29\u003c\/p\u003e \u003cp\u003e1.4.4 The International Capital Markets and Portfolio Management 29\u003c\/p\u003e \u003cp\u003e1.4.5 International Capital Budgeting 30\u003c\/p\u003e \u003cp\u003eQuestions 30\u003c\/p\u003e \u003cp\u003eAppendix: The Origins and Consequences of International Trade 31\u003c\/p\u003e \u003cp\u003eQuestions 35\u003c\/p\u003e \u003cp\u003e\u003cstrong style=\"box-sizing: border-box;\"\u003e2 The Determination of Exchange Rates 37\u003c\/strong\u003e\u003c\/p\u003e \u003cp\u003e2.1 Setting The Equilibrium Spot Exchange Rate 38\u003c\/p\u003e \u003cp\u003e2.1.1 Factors That Affect the Equilibrium Exchange Rate 39\u003c\/p\u003e \u003cp\u003e2.1.2 Calculating Exchange Rate Changes 41\u003c\/p\u003e \u003cp\u003e2.2 Expectations and The Asset Market Model of Exchange Rates 43\u003c\/p\u003e \u003cp\u003e2.2.1 The Nature of Money and Currency Values 44\u003c\/p\u003e \u003cp\u003e2.2.2 Central Bank Reputations and Currency Values 44\u003c\/p\u003e \u003cp\u003e2.3 The Fundamentals of Central Bank Intervention 49\u003c\/p\u003e \u003cp\u003e2.3.1 How Real Exchange Rates Affect Relative Competitiveness 50\u003c\/p\u003e \u003cp\u003e2.3.2 Foreign Exchange Market Intervention 50\u003c\/p\u003e \u003cp\u003e2.3.3 The Effects of Foreign Exchange Market Intervention 53\u003c\/p\u003e \u003cp\u003e2.4 The Equilibrium Approach To Exchange Rates 55\u003c\/p\u003e \u003cp\u003e2.5 Disequilibrium Theory and Exchange Rate Overshooting 55\u003c\/p\u003e \u003cp\u003e2.5.1 The Equilibrium Theory of Exchange Rates and Its Implications 56\u003c\/p\u003e \u003cp\u003e2.6 Conclusions 58\u003c\/p\u003e \u003cp\u003eQuestions 60\u003c\/p\u003e \u003cp\u003eProblems 61\u003c\/p\u003e \u003cp\u003eReferences 62\u003c\/p\u003e \u003cp\u003e\u003cstrong style=\"box-sizing: border-box;\"\u003e3 The International Monetary System 63\u003c\/strong\u003e\u003c\/p\u003e \u003cp\u003e3.1 Alternative Exchange Rate Systems 64\u003c\/p\u003e \u003cp\u003e3.1.1 The Trilemma and Exchange Rate Regime Choice 64\u003c\/p\u003e \u003cp\u003e3.1.2 Free Float 66\u003c\/p\u003e \u003cp\u003e3.1.3 Managed Float 67\u003c\/p\u003e \u003cp\u003e3.1.4 Target-Zone Arrangement 69\u003c\/p\u003e \u003cp\u003e3.1.5 Fixed Rate System 69\u003c\/p\u003e \u003cp\u003e3.2 A Brief History of the International Monetary System 70\u003c\/p\u003e \u003cp\u003e3.2.1 The Classical Gold Standard 71\u003c\/p\u003e \u003cp\u003e3.2.2 How the Classical Gold Standard Worked in Practice: 1821–1914 73\u003c\/p\u003e \u003cp\u003e3.2.3 The Gold Exchange Standard and Its Aftermath: 1925–1944 73\u003c\/p\u003e \u003cp\u003e3.2.4 The Bretton Woods System: 1946–1971 74\u003c\/p\u003e \u003cp\u003e3.2.5 The Post-Bretton Woods System: 1971 to the Present 76\u003c\/p\u003e \u003cp\u003e3.2.6 Assessment of the Floating Rate System 77\u003c\/p\u003e \u003cp\u003e3.3 The European Monetary System and Monetary Union 78\u003c\/p\u003e \u003cp\u003e3.3.1 The Exchange Rate Mechanism 79\u003c\/p\u003e \u003cp\u003e3.3.2 Lessons from the European Monetary System 79\u003c\/p\u003e \u003cp\u003e3.3.3 The Currency Crisis of September 1992 79\u003c\/p\u003e \u003cp\u003e3.3.4 The Exchange Rate Mechanism Is Abandoned in August 1993 80\u003c\/p\u003e \u003cp\u003e3.3.5 European Monetary Union 81\u003c\/p\u003e \u003cp\u003e3.3.6 Optimum Currency Area 88\u003c\/p\u003e \u003cp\u003e3.3.7 Exchange Rate Regimes Today 93\u003c\/p\u003e \u003cp\u003e3.4 Emerging Market Currency Crises 96\u003c\/p\u003e \u003cp\u003e3.4.1 Transmission Mechanisms 96\u003c\/p\u003e \u003cp\u003e3.4.2 Origins of Emerging Market Crises 96\u003c\/p\u003e \u003cp\u003e3.4.3 Policy Proposals for Dealing with Emerging Market Crises 97\u003c\/p\u003e \u003cp\u003e3.5 Summary and Conclusions 98\u003c\/p\u003e \u003cp\u003eQuestions 99\u003c\/p\u003e \u003cp\u003eProblems 100\u003c\/p\u003e \u003cp\u003eReferences 100\u003c\/p\u003e \u003cp\u003e\u003cstrong style=\"box-sizing: border-box;\"\u003e4 Parity Conditions in International Finance and Currency Forecasting 101\u003c\/strong\u003e\u003c\/p\u003e \u003cp\u003e4.1 Arbitrage and the Law of One Price 102\u003c\/p\u003e \u003cp\u003e4.2 Purchasing Power Parity 104\u003c\/p\u003e \u003cp\u003e4.2.1 The Lesson of Purchasing Power Parity 108\u003c\/p\u003e \u003cp\u003e4.2.2 Expected Inflation and Exchange Rate Changes 109\u003c\/p\u003e \u003cp\u003e4.2.3 The Monetary Approach 110\u003c\/p\u003e \u003cp\u003e4.2.4 Empirical Evidence 110\u003c\/p\u003e \u003cp\u003e4.3 The Fisher Effect 113\u003c\/p\u003e \u003cp\u003e4.3.1 Empirical Evidence 114\u003c\/p\u003e \u003cp\u003e4.4 The International Fisher Effect 118\u003c\/p\u003e \u003cp\u003e4.4.1 Empirical Evidence 119\u003c\/p\u003e \u003cp\u003e4.5 Interest Rate Parity Theory 120\u003c\/p\u003e \u003cp\u003e4.5.1 Empirical Evidence 123\u003c\/p\u003e \u003cp\u003e4.6 The Relationship Between The Forward Rate and The Future Spot Rate 123\u003c\/p\u003e \u003cp\u003e4.6.1 Empirical Evidence 126\u003c\/p\u003e \u003cp\u003e4.7 Currency Forecasting 126\u003c\/p\u003e \u003cp\u003e4.7.1 Requirements for Successful Currency Forecasting 127\u003c\/p\u003e \u003cp\u003e4.7.2 Market-Based Forecasts 127\u003c\/p\u003e \u003cp\u003e4.7.3 Model-Based Forecasts 129\u003c\/p\u003e \u003cp\u003e4.7.4 Model Evaluation 130\u003c\/p\u003e \u003cp\u003e4.7.5 Forecasting Controlled Exchange Rates 132\u003c\/p\u003e \u003cp\u003e4.8 Summary and Conclusions 132\u003c\/p\u003e \u003cp\u003eQuestions 133\u003c\/p\u003e \u003cp\u003eProblems 135\u003c\/p\u003e \u003cp\u003eReferences 137\u003c\/p\u003e \u003cp\u003e\u003cstrong style=\"box-sizing: border-box;\"\u003e5 The Balance of Payments and International Economic Linkages 139\u003c\/strong\u003e\u003c\/p\u003e \u003cp\u003e5.1 Balance-Of-Payments Categories 140\u003c\/p\u003e \u003cp\u003e5.1.1 Current Account 141\u003c\/p\u003e \u003cp\u003e5.1.2 Capital Account 144\u003c\/p\u003e \u003cp\u003e5.1.3 Financial Account 144\u003c\/p\u003e \u003cp\u003e5.1.4 Balance-of-Payments Measures 145\u003c\/p\u003e \u003cp\u003e5.1.5 The Missing Numbers 146\u003c\/p\u003e \u003cp\u003e5.2 The International Flow of Goods, Services, and Capital 146\u003c\/p\u003e \u003cp\u003e5.2.1 Domestic Saving and Investment and the Financial Account 146\u003c\/p\u003e \u003cp\u003e5.2.2 The Link between the Current and Financial Accounts 147\u003c\/p\u003e \u003cp\u003e5.2.3 Government Budget Deficits and Current-Account Deficits 149\u003c\/p\u003e \u003cp\u003e5.2.4 The Current Situation 150\u003c\/p\u003e \u003cp\u003e5.3 Coping with the Current-Account Deficit 153\u003c\/p\u003e \u003cp\u003e5.3.1 Currency Depreciation 153\u003c\/p\u003e \u003cp\u003e5.3.2 Protectionism 157\u003c\/p\u003e \u003cp\u003e5.3.3 Ending Foreign Ownership of Domestic Assets 158\u003c\/p\u003e \u003cp\u003e5.3.4 Boosting the Saving Rate 158\u003c\/p\u003e \u003cp\u003e5.3.5 External Policies 159\u003c\/p\u003e \u003cp\u003e5.3.6 Current-Account Deficits and Unemployment 160\u003c\/p\u003e \u003cp\u003e5.3.7 The Bottom Line on Current-Account Deficits and Surpluses 161\u003c\/p\u003e \u003cp\u003e5.4 Summary and Conclusions 161\u003c\/p\u003e \u003cp\u003eQuestions 162\u003c\/p\u003e \u003cp\u003eProblems 163\u003c\/p\u003e \u003cp\u003eReferences 164\u003c\/p\u003e \u003cp\u003e\u003cstrong style=\"box-sizing: border-box;\"\u003ePart II The Foreign Exchange and Derivative Markets\u003c\/strong\u003e\u003c\/p\u003e \u003cp\u003e\u003cstrong style=\"box-sizing: border-box;\"\u003e6 The Foreign Exchange Market 167\u003c\/strong\u003e\u003c\/p\u003e \u003cp\u003e6.1 Organization of the Foreign Exchange Market 168\u003c\/p\u003e \u003cp\u003e6.1.1 The Participants 169\u003c\/p\u003e \u003cp\u003e6.1.2 Size 172\u003c\/p\u003e \u003cp\u003e6.2 The Spot Market 174\u003c\/p\u003e \u003cp\u003e6.2.1 Spot Quotations 174\u003c\/p\u003e \u003cp\u003e6.2.2 The Mechanics of Spot Transactions 181\u003c\/p\u003e \u003cp\u003e6.3 The Forward Market 181\u003c\/p\u003e \u003cp\u003e6.3.1 Forward Quotations 183\u003c\/p\u003e \u003cp\u003e6.3.2 Forward Contract Maturities 186\u003c\/p\u003e \u003cp\u003e6.4 Summary and Conclusions 186\u003c\/p\u003e \u003cp\u003eQuestions 186\u003c\/p\u003e \u003cp\u003eProblems 187\u003c\/p\u003e \u003cp\u003eReferences 188\u003c\/p\u003e \u003cp\u003e\u003cstrong style=\"box-sizing: border-box;\"\u003e7 Currency Futures and Options Markets 189\u003c\/strong\u003e\u003c\/p\u003e \u003cp\u003e7.1 Futures Contracts 190\u003c\/p\u003e \u003cp\u003e7.1.1 Forward Contract versus Futures Contract 191\u003c\/p\u003e \u003cp\u003e7.2 Currency Options 194\u003c\/p\u003e \u003cp\u003e7.2.1 Market Structure 195\u003c\/p\u003e \u003cp\u003e7.2.2 Using Currency Options 196\u003c\/p\u003e \u003cp\u003e7.2.3 Option Pricing and Valuation 201\u003c\/p\u003e \u003cp\u003e7.2.4 Using Forward or Futures Contracts versus Options Contracts 203\u003c\/p\u003e \u003cp\u003e7.2.5 Futures Options 205\u003c\/p\u003e \u003cp\u003e7.3 Reading Currency Futures and Options Prices 206\u003c\/p\u003e \u003cp\u003e7.4 Summary and Conclusions 206\u003c\/p\u003e \u003cp\u003eQuestions 208\u003c\/p\u003e \u003cp\u003eProblems 209\u003c\/p\u003e \u003cp\u003eAppendix: Option Pricing Using Black-Scholes 210\u003c\/p\u003e \u003cp\u003eA.1 The Black-Scholes Model 210\u003c\/p\u003e \u003cp\u003eA.2 Implied Volatilities 212\u003c\/p\u003e \u003cp\u003eA.3 Shortcomings of the Black-Scholes Option Pricing Model 212\u003c\/p\u003e \u003cp\u003eProblems 213\u003c\/p\u003e \u003cp\u003eAppendix: Put-Call Option Interest Rate Parity 213\u003c\/p\u003e \u003cp\u003eProblems 215\u003c\/p\u003e \u003cp\u003eReferences 215\u003c\/p\u003e \u003cp\u003e\u003cstrong style=\"box-sizing: border-box;\"\u003e8 Currency, Interest Rate, and Credit Derivatives and Swaps 217\u003c\/strong\u003e\u003c\/p\u003e \u003cp\u003e8.1 Interest Rate and Currency Swaps 218\u003c\/p\u003e \u003cp\u003e8.1.1 Interest Rate Swaps 218\u003c\/p\u003e \u003cp\u003e8.1.2 Currency Swaps 221\u003c\/p\u003e \u003cp\u003e8.1.3 Economic Advantages of Swaps 228\u003c\/p\u003e \u003cp\u003e8.2 Interest Rate Forwards and Futures 229\u003c\/p\u003e \u003cp\u003e8.2.1 Forward Forwards 229\u003c\/p\u003e \u003cp\u003e8.2.2 Forward Rate Agreement 230\u003c\/p\u003e \u003cp\u003e8.2.3 Eurodollar Futures 231\u003c\/p\u003e \u003cp\u003e8.3 Structured Notes 233\u003c\/p\u003e \u003cp\u003e8.3.1 Inverse Floaters 233\u003c\/p\u003e \u003cp\u003e8.3.2 Callable Step-Up Note 234\u003c\/p\u003e \u003cp\u003e8.3.3 Step-Down Coupon Note 234\u003c\/p\u003e \u003cp\u003e8.4 Credit Default Swaps 235\u003c\/p\u003e \u003cp\u003e8.4.1 Single-Name CDS 235\u003c\/p\u003e \u003cp\u003e8.4.2 CDS Indexes 237\u003c\/p\u003e \u003cp\u003e8.5 Summary and Conclusions 238\u003c\/p\u003e \u003cp\u003eQuestions 239\u003c\/p\u003e \u003cp\u003eProblems 239\u003c\/p\u003e \u003cp\u003eReference 241\u003c\/p\u003e \u003cp\u003e\u003cstrong style=\"box-sizing: border-box;\"\u003ePart III Foreign Exchange Risk Management\u003c\/strong\u003e\u003c\/p\u003e \u003cp\u003e\u003cstrong style=\"box-sizing: border-box;\"\u003e9 Measuring and Managing Translation and Transaction Exposure 245\u003c\/strong\u003e\u003c\/p\u003e \u003cp\u003e9.1 Alternative Measures of Foreign Exchange Exposure 246\u003c\/p\u003e \u003cp\u003e9.1.1 Translation Exposure 246\u003c\/p\u003e \u003cp\u003e9.1.2 Transaction Exposure 246\u003c\/p\u003e \u003cp\u003e9.1.3 Operating Exposure 247\u003c\/p\u003e \u003cp\u003e9.2 Alternative Currency Translation Methods 247\u003c\/p\u003e \u003cp\u003e9.2.1 Current\/Noncurrent Method 248\u003c\/p\u003e \u003cp\u003e9.2.2 Monetary\/Nonmonetary Method 248\u003c\/p\u003e \u003cp\u003e9.2.3 Temporal Method 248\u003c\/p\u003e \u003cp\u003e9.2.4 Current Rate Method 249\u003c\/p\u003e \u003cp\u003e9.3 Transaction Exposure 251\u003c\/p\u003e \u003cp\u003e9.4 Designing a Hedging Strategy 251\u003c\/p\u003e \u003cp\u003e9.4.1 Objectives 252\u003c\/p\u003e \u003cp\u003e9.4.2 Costs and Benefits of Standard Hedging Techniques 255\u003c\/p\u003e \u003cp\u003e9.4.3 Centralization versus Decentralization 258\u003c\/p\u003e \u003cp\u003e9.4.4 Managing Risk Management 259\u003c\/p\u003e \u003cp\u003e9.4.5 Accounting for Hedging and FASB 133 260\u003c\/p\u003e \u003cp\u003e9.4.6 Empirical Evidence on Hedging 260\u003c\/p\u003e \u003cp\u003e9.5 Managing Translation Exposure 261\u003c\/p\u003e \u003cp\u003e9.5.1 Funds Adjustment 261\u003c\/p\u003e \u003cp\u003e9.5.2 Evaluating Alternative Hedging Mechanisms 262\u003c\/p\u003e \u003cp\u003e9.6 Managing Transaction Exposure 263\u003c\/p\u003e \u003cp\u003e9.6.1 Forward Market Hedge 263\u003c\/p\u003e \u003cp\u003e9.6.2 Money Market Hedge 265\u003c\/p\u003e \u003cp\u003e9.6.3 Risk Shifting 267\u003c\/p\u003e \u003cp\u003e9.6.4 Pricing Decisions 268\u003c\/p\u003e \u003cp\u003e9.6.5 Exposure Netting 269\u003c\/p\u003e \u003cp\u003e9.6.6 Currency Risk Sharing 270\u003c\/p\u003e \u003cp\u003e9.6.7 Currency Collars 270\u003c\/p\u003e \u003cp\u003e9.6.8 Cross-Hedging 273\u003c\/p\u003e \u003cp\u003e9.6.9 Foreign Currency Options 274\u003c\/p\u003e \u003cp\u003e9.7 Summary and Conclusions 277\u003c\/p\u003e \u003cp\u003eQuestions 278\u003c\/p\u003e \u003cp\u003eProblems 279\u003c\/p\u003e \u003cp\u003eReferences 282\u003c\/p\u003e \u003cp\u003eAppendix: Statement of Financial Accounting Standards No. 52 283\u003c\/p\u003e \u003cp\u003e\u003cstrong style=\"box-sizing: border-box;\"\u003e10 Measuring and Managing Economic Exposure 287\u003c\/strong\u003e\u003c\/p\u003e \u003cp\u003e10.1 Foreign Exchange Risk and Economic Exposure 288\u003c\/p\u003e \u003cp\u003e10.1.1 Real Exchange Rate Changes and Exchange Risk 289\u003c\/p\u003e \u003cp\u003e10.1.2 Importance of the Real Exchange Rate 290\u003c\/p\u003e \u003cp\u003e10.1.3 Inflation and Exchange Risk 291\u003c\/p\u003e \u003cp\u003e10.1.4 Competitive Effects of Real Exchange Rate Changes 292\u003c\/p\u003e \u003cp\u003e10.2 The Economic Consequences of Exchange Rate Changes 294\u003c\/p\u003e \u003cp\u003e10.2.1 Transaction Exposure 294\u003c\/p\u003e \u003cp\u003e10.2.2 Operating Exposure 295\u003c\/p\u003e \u003cp\u003e10.3 Identifying Economic Exposure 298\u003c\/p\u003e \u003cp\u003e10.3.1 Aspen Skiing Company 298\u003c\/p\u003e \u003cp\u003e10.3.2 Petróleos Mexicanos 298\u003c\/p\u003e \u003cp\u003e10.3.3 Toyota Motor Company 299\u003c\/p\u003e \u003cp\u003e10.4 Calculating Economic Exposure 300\u003c\/p\u003e \u003cp\u003e10.4.1 Spectrum’s Accounting Exposure 301\u003c\/p\u003e \u003cp\u003e10.4.2 Spectrum’s Economic Exposure 301\u003c\/p\u003e \u003cp\u003e10.5 An Operational Measure of Exchange Risk 305\u003c\/p\u003e \u003cp\u003e10.5.1 Limitations 306\u003c\/p\u003e \u003cp\u003e10.6 Managing Operating Exposure 307\u003c\/p\u003e \u003cp\u003e10.6.1 Marketing Management of Exchange Risk 307\u003c\/p\u003e \u003cp\u003e10.6.2 Production Management of Exchange Risk 310\u003c\/p\u003e \u003cp\u003e10.6.3 Planning for Exchange Rate Changes 313\u003c\/p\u003e \u003cp\u003e10.6.4 Financial Management of Exchange Risk 314\u003c\/p\u003e \u003cp\u003e10.7 Summary and Conclusions 316\u003c\/p\u003e \u003cp\u003eQuestions 318\u003c\/p\u003e \u003cp\u003eProblems 319\u003c\/p\u003e \u003cp\u003eReferences 322\u003c\/p\u003e \u003cp\u003e\u003cstrong style=\"box-sizing: border-box;\"\u003ePart IV The International Capital Markets and Portfolio Management\u003c\/strong\u003e\u003c\/p\u003e \u003cp\u003e\u003cstrong style=\"box-sizing: border-box;\"\u003e11 International Financing and National Capital Markets 325\u003c\/strong\u003e\u003c\/p\u003e \u003cp\u003e11.1 Corporate Sources and Uses of Funds 326\u003c\/p\u003e \u003cp\u003e11.1.1 Financial Markets versus Financial Intermediaries 326\u003c\/p\u003e \u003cp\u003e11.1.2 Financial Systems and Corporate Governance 327\u003c\/p\u003e \u003cp\u003e11.1.3 Globalization of Financial Markets 330\u003c\/p\u003e \u003cp\u003e11.2 National Capital Markets As International Financial Centers 332\u003c\/p\u003e \u003cp\u003e11.2.1 International Financial Markets 334\u003c\/p\u003e \u003cp\u003e11.2.2 Foreign Access to Domestic Markets 335\u003c\/p\u003e \u003cp\u003e11.3 Development Banks 340\u003c\/p\u003e \u003cp\u003e11.3.1 The World Bank Group 341\u003c\/p\u003e \u003cp\u003e11.3.2 Regional and National Development Banks 342\u003c\/p\u003e \u003cp\u003e11.3.3 Private Sector Alternatives 343\u003c\/p\u003e \u003cp\u003e11.4 Project Finance 344\u003c\/p\u003e \u003cp\u003e11.5 Summary and Conclusions 345\u003c\/p\u003e \u003cp\u003eQuestions 345\u003c\/p\u003e \u003cp\u003eProblems 346\u003c\/p\u003e \u003cp\u003eReferences 347\u003c\/p\u003e \u003cp\u003e\u003cstrong style=\"box-sizing: border-box;\"\u003e12 The Euromarkets 348\u003c\/strong\u003e\u003c\/p\u003e \u003cp\u003e12.1 The Eurocurrency Market 348\u003c\/p\u003e \u003cp\u003e12.1.1 Modern Origins 349\u003c\/p\u003e \u003cp\u003e12.1.2 Eurodollar Creation 350\u003c\/p\u003e \u003cp\u003e12.1.3 Eurocurrency Loans 351\u003c\/p\u003e \u003cp\u003e12.1.4 Relationship between Domestic and Eurocurrency Money Markets 353\u003c\/p\u003e \u003cp\u003e12.1.5 Euromarket Trends 354\u003c\/p\u003e \u003cp\u003e12.2 Eurobonds 355\u003c\/p\u003e \u003cp\u003e12.2.1 Swaps 355\u003c\/p\u003e \u003cp\u003e12.2.2 Links between the Domestic and Eurobond Markets 355\u003c\/p\u003e \u003cp\u003e12.2.3 Rationale for Existence of Eurobond Market 358\u003c\/p\u003e \u003cp\u003e12.2.4 Eurobonds versus Eurocurrency Loans 360\u003c\/p\u003e \u003cp\u003e12.3 Note Issuance Facilities and Euronotes 360\u003c\/p\u003e \u003cp\u003e12.3.1 Note Issuance Facilities versus Eurobonds 362\u003c\/p\u003e \u003cp\u003e12.3.2 Euro-Medium-Term Notes 363\u003c\/p\u003e \u003cp\u003e12.4 Euro-Commercial Paper 364\u003c\/p\u003e \u003cp\u003e12.5 The Asiacurrency Market 365\u003c\/p\u003e \u003cp\u003e12.6 Summary and Conclusions 365\u003c\/p\u003e \u003cp\u003eQuestions 366\u003c\/p\u003e \u003cp\u003eProblems 366\u003c\/p\u003e \u003cp\u003eReferences 367\u003c\/p\u003e \u003cp\u003e\u003cstrong style=\"box-sizing: border-box;\"\u003e13 International Portfolio Management 368\u003c\/strong\u003e\u003c\/p\u003e \u003cp\u003e13.1 The Risks and Benefits of International Equity Investing 369\u003c\/p\u003e \u003cp\u003e13.1.1 International Diversification 370\u003c\/p\u003e \u003cp\u003e13.1.2 Investing in Emerging Markets 376\u003c\/p\u003e \u003cp\u003e13.1.3 Barriers to International Diversification 380\u003c\/p\u003e \u003cp\u003e13.1.4 Ways to Invest Internationally 381\u003c\/p\u003e \u003cp\u003e13.2 International Bond Investing 383\u003c\/p\u003e \u003cp\u003e13.3 Optimal International Asset Allocation 383\u003c\/p\u003e \u003cp\u003e13.4 Measuring the Total Return From Foreign Portfolio Investing 385\u003c\/p\u003e \u003cp\u003e13.4.1 Bonds 385\u003c\/p\u003e \u003cp\u003e13.4.2 Stocks 385\u003c\/p\u003e \u003cp\u003e13.5 Measuring Exchange Risk on Foreign Securities 386\u003c\/p\u003e \u003cp\u003e13.5.1 Hedging Currency Risk 386\u003c\/p\u003e \u003cp\u003e13.6 Summary and Conclusions 387\u003c\/p\u003e \u003cp\u003eQuestions 387\u003c\/p\u003e \u003cp\u003eProblems 388\u003c\/p\u003e \u003cp\u003eReferences 390\u003c\/p\u003e \u003cp\u003e\u003cstrong style=\"box-sizing: border-box;\"\u003ePart V International Capital Budgeting\u003c\/strong\u003e\u003c\/p\u003e \u003cp\u003e\u003cstrong style=\"box-sizing: border-box;\"\u003e14 Country Risk Analysis 395\u003c\/strong\u003e\u003c\/p\u003e \u003cp\u003e14.1 Learning Objectives 395\u003c\/p\u003e \u003cp\u003e14.2 Measuring Political Risk 396\u003c\/p\u003e \u003cp\u003e14.2.1 Political Stability 397\u003c\/p\u003e \u003cp\u003e14.2.2 Economic Factors 399\u003c\/p\u003e \u003cp\u003e14.2.3 Subjective Factors 400\u003c\/p\u003e \u003cp\u003e14.3 Economic and Political Factors Underlying Country Risk 405\u003c\/p\u003e \u003cp\u003e14.3.1 Fiscal Irresponsibility 406\u003c\/p\u003e \u003cp\u003e14.3.2 Monetary Instability 406\u003c\/p\u003e \u003cp\u003e14.3.3 Controlled Exchange Rate System 408\u003c\/p\u003e \u003cp\u003e14.3.4 Wasteful Government Spending 408\u003c\/p\u003e \u003cp\u003e14.3.5 Resource Base 408\u003c\/p\u003e \u003cp\u003e14.3.6 Country Risk and Adjustment to External Shocks 409\u003c\/p\u003e \u003cp\u003e14.3.7 Market-Oriented versus Statist Policies 410\u003c\/p\u003e \u003cp\u003e14.3.8 Key Indicators of Country Risk and Economic Health 413\u003c\/p\u003e \u003cp\u003e14.4 Country Risk Analysis in International Lending 418\u003c\/p\u003e \u003cp\u003e14.4.1 The Mathematics of Sovereign Debt Analysis 418\u003c\/p\u003e \u003cp\u003e14.4.2 Country Risk and the Terms of Trade 420\u003c\/p\u003e \u003cp\u003e14.4.3 The Government’s Cost\/Benefit Calculus 421\u003c\/p\u003e \u003cp\u003e14.5 Summary and Conclusions 422\u003c\/p\u003e \u003cp\u003eQuestions 424\u003c\/p\u003e \u003cp\u003eProblems 424\u003c\/p\u003e \u003cp\u003eReferences 426\u003c\/p\u003e \u003cp\u003e\u003cstrong style=\"box-sizing: border-box;\"\u003e15 The Cost of Capital for Foreign Investments 427\u003c\/strong\u003e\u003c\/p\u003e \u003cp\u003e15.1 The Cost of Equity Capital 428\u003c\/p\u003e \u003cp\u003e15.2 The Weighted Average Cost of Capital For Foreign Projects 429\u003c\/p\u003e \u003cp\u003e15.3 Discount Rates for Foreign Investments 430\u003c\/p\u003e \u003cp\u003e15.3.1 Evidence from the Stock Market 431\u003c\/p\u003e \u003cp\u003e15.3.2 Key Issues in Estimating Foreign Project Discount Rates 432\u003c\/p\u003e \u003cp\u003e15.3.3 Proxy Companies 433\u003c\/p\u003e \u003cp\u003e15.3.4 The Relevant Base Portfolio 434\u003c\/p\u003e \u003cp\u003e15.3.5 The Relevant Market Risk Premium 438\u003c\/p\u003e \u003cp\u003e15.3.6 Recommendations 439\u003c\/p\u003e \u003cp\u003e15.4 The Cost of Debt Capital 439\u003c\/p\u003e \u003cp\u003e15.4.1 Annual Exchange Rate Change 440\u003c\/p\u003e \u003cp\u003e15.4.2 Using Sovereign Risk Spreads 441\u003c\/p\u003e \u003cp\u003e15.5 Establishing a Worldwide Capital Structure 441\u003c\/p\u003e \u003cp\u003e15.5.1 Foreign Subsidiary Capital Structure 442\u003c\/p\u003e \u003cp\u003e15.5.2 Joint Ventures 446\u003c\/p\u003e \u003cp\u003e15.6 Valuing Low-Cost Financing Opportunities 447\u003c\/p\u003e \u003cp\u003e15.6.1 Taxes 448\u003c\/p\u003e \u003cp\u003e15.6.2 Government Credit and Capital Controls 449\u003c\/p\u003e \u003cp\u003e15.6.3 Government Subsidies and Incentives 450\u003c\/p\u003e \u003cp\u003e15.7 Summary and Conclusions 452\u003c\/p\u003e \u003cp\u003eQuestions 453\u003c\/p\u003e \u003cp\u003eProblems 454\u003c\/p\u003e \u003cp\u003eReferences 455\u003c\/p\u003e \u003cp\u003e\u003cstrong style=\"box-sizing: border-box;\"\u003e16 Corporate Strategy and Foreign Direct Investment 457\u003c\/strong\u003e\u003c\/p\u003e \u003cp\u003e16.1 Theory of the Multinational Corporation 458\u003c\/p\u003e \u003cp\u003e16.1.1 Product and Factor Market Imperfections 458\u003c\/p\u003e \u003cp\u003e16.1.2 Financial Market Imperfections 459\u003c\/p\u003e \u003cp\u003e16.1.3 The Strategy of Multinational Enterprise 460\u003c\/p\u003e \u003cp\u003e16.1.4 Innovation-Based Multinationals 460\u003c\/p\u003e \u003cp\u003e16.1.5 The Mature Multinationals 460\u003c\/p\u003e \u003cp\u003e16.1.6 The Senescent Multinationals 463\u003c\/p\u003e \u003cp\u003e16.1.7 Foreign Direct Investment and Survival 464\u003c\/p\u003e \u003cp\u003e16.2 Designing a Global Expansion Strategy 469\u003c\/p\u003e \u003cp\u003e16.2.1 Awareness of Profitable Investments 469\u003c\/p\u003e \u003cp\u003e16.2.2 Selecting a Mode of Entry 469\u003c\/p\u003e \u003cp\u003e16.2.3 Auditing the Effectiveness of Entry Modes 470\u003c\/p\u003e \u003cp\u003e16.2.4 Using Appropriate Evaluation Criteria 471\u003c\/p\u003e \u003cp\u003e16.2.5 Estimating the Longevity of a Competitive Advantage 471\u003c\/p\u003e \u003cp\u003e16.3 Summary and Conclusions 472\u003c\/p\u003e \u003cp\u003eQuestions 474\u003c\/p\u003e \u003cp\u003eProblems 475\u003c\/p\u003e \u003cp\u003eReferences 475\u003c\/p\u003e \u003cp\u003e\u003cstrong style=\"box-sizing: border-box;\"\u003e17 Capital Budgeting for the Multinational Corporation 477\u003c\/strong\u003e\u003c\/p\u003e \u003cp\u003e17.1 Basics of Capital Budgeting 478\u003c\/p\u003e \u003cp\u003e17.1.1 Net Present Value 478\u003c\/p\u003e \u003cp\u003e17.1.2 Incremental Cash Flows 479\u003c\/p\u003e \u003cp\u003e17.1.3 Alternative Capital-Budgeting Frameworks 482\u003c\/p\u003e \u003cp\u003e17.2 Issues in Foreign Investment Analysis 483\u003c\/p\u003e \u003cp\u003e17.2.1 Parent versus Project Cash Flows 484\u003c\/p\u003e \u003cp\u003e17.2.2 Political and Economic Risk Analysis 485\u003c\/p\u003e \u003cp\u003e17.2.3 Exchange Rate Changes and Inflation 486\u003c\/p\u003e \u003cp\u003e17.3 Foreign Project Appraisal: The Case of International Diesel Corporation 487\u003c\/p\u003e \u003cp\u003e17.3.1 Estimation of Project Cash Flows 487\u003c\/p\u003e \u003cp\u003e17.3.2 Estimation of Parent Cash Flows 492\u003c\/p\u003e \u003cp\u003e17.4 Political Risk Analysis 495\u003c\/p\u003e \u003cp\u003e17.4.1 Expropriation 495\u003c\/p\u003e \u003cp\u003e17.4.2 Blocked Funds 496\u003c\/p\u003e \u003cp\u003e17.5 Growth Options and Project Evaluation 497\u003c\/p\u003e \u003cp\u003e17.6 Summary and Conclusions 500\u003c\/p\u003e \u003cp\u003eQuestions 501\u003c\/p\u003e \u003cp\u003eProblems 502\u003c\/p\u003e \u003cp\u003eReferences 503\u003c\/p\u003e \u003cp\u003eAppendix: Managing Political Risks 503\u003c\/p\u003e \u003cp\u003e\u003cstrong style=\"box-sizing: border-box;\"\u003e18 Managing the Internal Capital Markets of Multinational Corporations 509\u003c\/strong\u003e\u003c\/p\u003e \u003cp\u003e18.1 The Value of The Multinational Financial System 510\u003c\/p\u003e \u003cp\u003e18.1.1 Mode of Transfer 510\u003c\/p\u003e \u003cp\u003e18.1.2 Timing Flexibility 511\u003c\/p\u003e \u003cp\u003e18.1.3 Value 512\u003c\/p\u003e \u003cp\u003e18.2 Intercompany Fund-Flow Mechanisms: Costs and Benefits 513\u003c\/p\u003e \u003cp\u003e18.2.1 Tax Factors and the Tax Cuts and Jobs Act of 2017 513\u003c\/p\u003e \u003cp\u003e18.2.2 Transfer Pricing 516\u003c\/p\u003e \u003cp\u003e18.2.3 Offshore Centers 520\u003c\/p\u003e \u003cp\u003e18.2.4 Fees and Royalties 521\u003c\/p\u003e \u003cp\u003e18.2.5 Leading and Lagging 522\u003c\/p\u003e \u003cp\u003e18.2.6 Intercompany Loans 524\u003c\/p\u003e \u003cp\u003e18.2.7 Dividends 527\u003c\/p\u003e \u003cp\u003e18.2.8 Equity versus Debt 529\u003c\/p\u003e \u003cp\u003e18.3 Designing a Global Remittance Policy 530\u003c\/p\u003e \u003cp\u003e18.3.1 Prerequisites 532\u003c\/p\u003e \u003cp\u003e18.3.2 Information Requirements 532\u003c\/p\u003e \u003cp\u003e18.3.3 Behavioral Consequences 532\u003c\/p\u003e \u003cp\u003e18.4 Summary and Conclusions 534\u003c\/p\u003e \u003cp\u003eQuestions 534\u003c\/p\u003e \u003cp\u003eProblems 535\u003c\/p\u003e \u003cp\u003eReferences 536\u003c\/p\u003e \u003cp\u003eGlossary G-1\u003c\/p\u003e \u003cp\u003eIndex I-1\u003c\/p\u003e","brand":"John Wiley \u0026 Sons Inc","offers":[{"title":"Default Title","offer_id":49407114576215,"sku":"9781119668855","price":53.19,"currency_code":"GBP","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0817\/1739\/5799\/files\/9781119668855.jpg?v=1730498234","url":"https:\/\/bookcurl.com\/products\/multinational-financial-management-9781119668855","provider":"Book Curl","version":"1.0","type":"link"}