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Multinational Business Finance

by: Eiteman, David K.; Stonehill, Arthur I.; Moffett, Michael H.

Multinational Business Finance

by: Eiteman, David K.; Stonehill, Arthur I.; Moffett, Michael H.

ISBN 13:
9780321357960
ISBN 10:
0321357965
Edition: 11th
Format: Hardcover
Copyright: 01/01/2010
Publisher: Prentice Hall
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Summary

Renowned for its authoritative, comprehensive coverage of contemporary international finance, Multinational Business Finance trains the leaders of tomorrow's multinational enterprises to recognize and capitalize on the unique characteristics of global markets. The text employs the theme of globalization, the process by which a firm moves from a domestic to a multinational business orientation, to unify the coverage throughout the seven parts. Book jacket.

PART I GLOBAL FINANCIAL ENVIRONMENT

(100)

Comparative Corporate Governance and Financial Goals

(33)

What Is Different about Global Financial Management?

(1)

Separation of Ownership from Management

(1)

What Is the Goal of Management?

(5)

Corporate Governance

(12)

Note on Currency Terminology

(2)

MINI-CASE The Failure of Corporate Governance at Enron

(12)

Summary

Questions

Problems

Internet Exercises

Selected Readings

(7)

The International Monetary System

(33)

History of the International Monetary System

(6)

Contemporary Currency Regimes

(6)

Emerging Markets and Regime Choices

(3)

The Birth of a European Currency: The Euro

(6)

Exchange Rate Regimes: What Lies Ahead?

(1)

MINI-CASE The Creation of Eurodollars

(2)

MINI-CASE The Revaluation of the Chinese Yuan

(9)

Summary

Questions

Problems

Internet Exercises

Selected Readings

(5)

The Balance of Payments

(33)

Typical Balance of Payments Transactions

(1)

Fundamentals of Balance of Payments Accounting

(2)

The Accounts of the Balance of Payments

(3)

The Capital and Financial Accounts

(5)

The Balance of Payments in Total

(1)

The Balance of Payments Interaction with Key Macroeconomic Variables

(5)

Trade Balances and Exchange Rates

(4)

Capital Mobility

(3)

MINI-CASE Turkey's Kriz (A): Deteriorating Balance of Payments

(10)

Summary

Questions

Problems

Internet Exercises

Selected Readings

(7)

PART II FOREIGN EXCHANGE THEORY

101

(76)

International Parity Conditions

102

(39)

Prices and Exchange Rates

102

(9)

Interest Rates and Exchange Rates

111

(9)

Forward Rate as an Unbiased Predictor of the Future Spot Rate

120

(2)

Prices, Interest Rates, and Exchange Rates in Equilibrium

122

(1)

MINI-CASE The Introduction of the Porsche 911 Carrera 4S Cabriolet

123

(2)

MINI-CASE Turkey's Kriz (B): Uncovered Interest Arbitrage

125

(12)

Summary

Questions

Problems

Internet Exercises

Selected Readings

128

(9)

APPENDIX An Algebraic Primer to International Parity Conditions

137

(4)

Foreign Exchange Rate Determination and Forecasting

141

(36)

A Roadmap to Exchange Rate Determination

141

(2)

Exchange Rate Determination: The Theoretical Thread

143

(2)

The Asset Market Approach to Forecasting

145

(3)

Disequilibrium: Exchange Rates in Emerging Markets

148

(1)

Illustrative Case: The Asian Crisis

149

(3)

Illustrative Case: The Russian Crisis of 1998

152

(3)

Illustrative Case: The Argentine Crisis of 2002

155

(6)

Forecasting in Practice

161

(7)

MINI-CASE JPMorgan Chase's Forecasting Accuracy

168

(9)

Summary

Questions

Problems

Internet Exercises

Selected Readings

170

(7)

PART III THE FOREIGN EXCHANGE MARKET AND DERIVATIVES

177

(74)

The Foreign Exchange Market

178

(29)

Geographical Extent of the Foreign Exchange Market

178

(1)

Functions of the Foreign Exchange Market

179

(1)

Market Participants

180

(4)

Transactions in the Interbank Market

184

(1)

Size of the Market

185

(2)

Foreign Exchange Rates and Quotations

187

(10)

MINI-CASE The Venezuelan Bolivar Black Market

197

(10)

Summary

Questions

Problems

Internet Exercises

Selected Readings

201

(6)

Foreign Currency Derivatives

207

(44)

Financial Derivatives

207

(1)

Foreign Currency Futures

208

(3)

Currency Options

211

(3)

Foreign Currency Speculation

214

(7)

Option Pricing and Valuation

221

(3)

Currency Option Pricing Sensitivity

224

(9)

Prudence in Practice

233

(2)

MINI-CASE Rogue Trader, Nicholas Leeson

235

(11)

Summary

Questions

Problems

Internet Exercises

Selected Readings

239

(7)

APPENDIX Currency Option Pricing Theory

246

(5)

PART IV FOREIGN EXCHANGE EXPOSURE

251

(120)

Transaction Exposure

253

(48)

Types of Foreign Exchange Exposure

253

(2)

Why Hedge?

255

(3)

Measurement of Transaction Exposure

258

(2)

Dayton Manufacturing's Transaction Exposure

260

(8)

Strategy Choice and Outcome

268

(4)

Risk Management in Practice

272

(2)

MINI-CASE Xian-Janssen Pharmaceutical (China) and the Euro

274

(4)

MINI-CASE Lufthansa's Purchase of Boeing 737s

278

(12)

Summary

Questions

Problems

Internet Exercises

Selected Readings

279

(11)

APPENDIX Complex Options

290

(11)

Operating Exposure

301

(34)

Attributes of Operating Exposure

301

(3)

Measuring the Impact of Operating Exposure

304

(1)

Illustration of Operating Exposure: Carlton, Inc.

305

(5)

Strategic Management of Operating Exposure

310

(2)

Proactive Management of Operating Exposure

312

(10)

MINI-CASE Porsche Exposed

322

(4)

MINI-CASE Toyota's European Operating Exposure

326

(9)

Summary

Questions

Problems

Internet Exercises

Selected Readings

330

(5)

Translation Exposure

335

(36)

Overview of Translation

335

(7)

Translation Example: Carlton Germany

342

(6)

Managing Translation Exposure

348

(5)

Evaluation of Performance

353

(4)

MINI-CASE LaJolla Engineering Services

357

(8)

Summary

Questions

Problems

Internet Exercises

Selected Readings

360

(5)

APPENDIX A Basics of Foreign Currency Accounting

365

(3)

APPENDIX B 2004 Risk Management Survey

368

(3)

PART V FINANCING THE GLOBAL FIRM

371

(154)

Global Cost and Availability of Capital

373

(38)

Weighted Average Cost of Capital

375

(6)

The Demand for Foreign Securities: The Role of International Portfolio Investors

381

(5)

Illustrative Case: Novo Industri A/S (Novo)

386

(7)

The Cost of Capital for MNEs Compared to Domestic Firms

393

(2)

Solving a Riddle: Is the Weighted Average Cost of Capital for MNEs Really Higher than for Their Domestic Counterparts?

395

(3)

MINI-CASE Petrobras of Brazil and the Cost of Capital

398

(13)

Summary

Questions

Problems

Internet Exercises

Selected Readings

402

(9)

Sourcing Equity Globally

411

(23)

Designing a Strategy to Source Equity Globally

411

(4)

Foreign Equity Listing and Issuance

415

(3)

Effect of Cross-Listing and Equity Issuance on Share Price

418

(3)

Barriers to Cross-Listing and Selling Equity Abroad

421

(1)

Alternative Instruments to Source Equity in Global Markets

422

(5)

MINI-CASE Deutsche Bank's Global Registered Shares

427

(7)

Summary

Questions

Problems

Internet Exercises

Selected Readings

428

(6)

Financial Structure and International Debt

434

(32)

Optimal Financial Structure

434

(1)

Optimal Financial Structure and the MNE

435

(3)

Financial Structure of Foreign Subsidiaries

438

(5)

International Debt Markets

443

(8)

Project Financing

451

(3)

MINI-CASE Tirstrup BioMechanics (Denmark): Raising Dollar Debt

454

(2)

MINI-CASE Tenaga Nasional Berhad's (TNB) Foreign Currency Debt

456

(10)

Summary

Questions

Problems

Internet Exercises

Selected Readings

459

(7)

Interest Rate and Currency Swaps

466

(35)

Defining Interest Rate Risk

466

(1)

Management of Interest Rate Risk

467

(10)

Carlton Corporation: Swapping to Fixed Rates

477

(4)

Carlton Corporation: Swapping Floating Dollars into Fixed-Rate Swiss Francs

481

(2)

Counterparty Risk

483

(1)

Illustrative Case: A Three-Way Back-to-Back Cross-Currency Swap

484

(1)

MINI-CASE McDonald's Corporation's British Pound Exposure

485

(6)

Summary

Questions

Problems

Internet Exercises

Selected Readings

486

(5)

APPENDIX Advanced Topics in Interest Rate Risk Management

491

(10)

Summary

500

(1)

International Portfolio Theory and Diversification

501

(24)

International Diversification and Risk

501

(4)

Internationalizing the Domestic Portfolio

505

(5)

National Markets and Asset Performance

510

(6)

MINI-CASE Strategic Currency Hedging

516

(9)

Summary

Questions

Problems

Internet Exercises

Selected Readings

518

(7)

PART VI FOREIGN INVESTMENT DECISIONS

525

(116)

Foreign Direct Investment Theory and Strategy

526

(24)

The Theory of Comparative Advantage

526

(5)

Market Imperfections: A Rationale for the Existence of the Multinational Firm

531

(2)

Sustaining and Transferring Competitive Advantage

533

(3)

The OLI Paradigm and Internalization

536

(1)

Deciding Where to Invest

537

(2)

How to Invest Abroad: Modes of Foreign Involvement

539

(5)

MINI-CASE Benecol's Global Licensing Agreement

544

(6)

Summary

Questions

Problems

Internet Exercises

Selected Readings

545

(5)

Political Risk Assessment and Management

550

(30)

Defining Political Risk

550

(1)

Assessing Political Risk

551

(2)

Firm-Specific Risks

553

(4)

Country-Specific Risks: Transfer Risk

557

(4)

Country-Specific Risks: Cultural and Institutional Risks

561

(5)

Global-Specific Risks

566

(6)

MINI-CASE Globalization and Starbucks Coffee

572

(8)

Summary

Questions

Internet Exercises

Selected Readings

576

(4)

Multinational Capital Budgeting

580

(34)

Complexities of Budgeting for a Foreign Project

581

(1)

Project versus Parent Valuation

582

(1)

Illustrative Case: Cemex Enters Indonesia

583

(14)

Real Option Analysis

597

(1)

MINI-CASE Carlton's Chinese Market Entry---An Application of Real Option Analysis

598

(9)

Summary

Questions

Problems

Internet Exercises

Selected Readings

600

(7)

APPENDIX Adjusting for Risk in Foreign Investments

607

(7)

Cross-Border Mergers, Acquisitions, and Valuation

614

(27)

Cross-Border Mergers and Acquisitions

614

(2)

Cross-Border Mergers and Acquisitions Drivers

616

(2)

The Cross-Border Acquisition Process

618

(3)

Corporate Governance and Shareholder Rights

621

(3)

Illustrative Case: The Potential Partial Acquisition of Tsingtao Brewery Company Ltd., China

624

(8)

MINI-CASE The Bidding War for Harbin Brewery Group (China)

632

(9)

Summary

Questions

Problems

Internet Exercises

Selected Readings

636

(5)

PART VII MANAGING MULTINATIONAL OPERATIONS

641

International Trade Finance

643

(33)

The Trade Relationship

643

(2)

The Trade Dilemma

645

(1)

Benefits of the System

646

(2)

Key Documents

648

(3)

Draft

651

(1)

Bill of Lading (B/L)

652

(1)

Example: Documentation in a Typical Trade Transaction

653

(2)

Government Programs to Help Finance Exports

655

(2)

Trade Financing Alternatives

657

(3)

Forfaiting: Medium- and Long-Term Financing

660

(3)

Countertrade

663

(3)

MINI-CASE Crosswell International's Precious Ultra-Thin Diapers

666

(10)

Summary

Questions

Problems

Internet Exercises

Selected Readings

670

(6)

Multinational Tax Management

676

(37)

Tax Principles

676

(9)

Transfer Pricing

685

(5)

U.S. Taxation of Foreign Source Income

690

(8)

Tax-Haven Subsidiaries and International Offshore Financial Centers

698

(2)

MINI-CASE Stanley Works and Corporate Inversion

700

(13)

Summary

Questions

Problems

Internet Exercises

Selected Readings

706

(7)

Working Capital Management

713

Carlton Brazil's Operating Cycle

713

(2)

Carlton's Repositioning Decisions

715

(1)

Constraints on Repositioning Funds

716

(1)

Conduits for Moving Funds by Unbundling Them

717

(2)

International Dividend Remittances

719

(1)

Net Working Capital

720

(7)

International Cash Management

727

(6)

Financing Working Capital

733

(3)

MINI-CASE Honeywell and Pakistan International Airways

736

Summary

Questions

Problems

Internet Exercises

Selected Readings

739

Bibliography

(26)

Glossary

(23)

Author Index

(2)

Subject Index

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Multinational Business Finance

Multinational Business Finance

9780321357960

0321357965

Summary

Table of Contents

Supplemental Materials

Write a Review

Amazon no longer offers textbook rentals. We do!

Multinational Business Finance

Multinational Business Finance

9780321357960

0321357965

Summary

Table of Contents

Supplemental Materials

Write a Review

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