Fundamentals Of Multinational Finance

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

ISBN 13:
9780321280312
ISBN 10:
0321280318
Edition: 3rd
Format: Hardcover
Copyright: 01/01/2009
Publisher: Addison Wesley
Newer Edition

Note: Not guaranteed to come with supplemental materials (access cards, study guides, lab manuals, CDs, etc.)

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Summary

Written for the undergraduate student, Fundamentals of Multinational Finance, Second Edition is a focused, streamlined adaptation of the market-leading classic, Multinational Business Finance.Committed to preparing the leaders of tomorrow's multinational enterprises, the authors have included numerous mini-cases and real-world examples to teach students to recognize the challenges and benefit from the opportunities inherent in modern global markets. Lucid explanations and engaging vignettes are rendered in the authoritative voice of the best-selling authors.

PART 1 GLOBAL FINANCIAL ENVIRONMENT

(88)

Financial Goals and Corporate Governance

(32)

What Is Different About Global Financial Management?

(1)

The Globalization Process

(1)

Global Transition I: Trident Moves from the Domestic Phase to the International Trade Phase

(2)

Global Transition II: The International Trade Phase to the Multinational Phase

(5)

What Is the Goal of Management?

(3)

Corporate Governance

(15)

Real World Example 1.1 Corporate Crime: The Reckoning

(1)

Real World Example 1.2 When Scandals Go Global

(3)

Real World Example 1.3 Conrad Black and Minority Shareholder Rights

(1)

Mini-Case: The Failure of Corporate Governance at Enron

(4)

Summary of Learning Objectives

(1)

Questions

(1)

Problems

(2)

Internet Exercises

(1)

The International Monetary System

(28)

Currency Terminology

(1)

History of the International Monetary System

(8)

Contemporary Currency Regimes

(3)

Emerging Markets and Regime Choices

(3)

The Birth of a Currency: The Euro

(5)

Real World Example 2.1 The Chinese Yuan (Or Renminbi)

(1)

Real World Example 2.2 will the New Member States of the EU Automatically Adopt the Euro?

(1)

Exchange Rate Regimes: What Lies Ahead?

(3)

Mini-Case: The Creation of Eurodollars

(2)

Summary of Learning Objectives

(1)

Questions

(1)

Problems

(1)

Internet Exercises

(1)

The Balance of Payments

(26)

Typical Balance of Payments Transactions

(1)

Fundamentals of Balance of Payments Accounting

(2)

The Accounts of the Balance of Payments

(2)

The Capital/Financial Account

(5)

The Balance of Payments in Total

(1)

The Balance of Payments Interaction with Key Macroeconomic Variables

(4)

Capital Mobility

(5)

Real World Example 3.1 The United States as the World's Largest Debtor Nation

(2)

Mini-Case: Turkey's Kriz (A): Deteriorating Balance of Payments

(2)

Summary of Learning Objectives

(1)

Questions

(2)

Problems

(2)

Internet Exercises

(1)

PART 2 FOREIGN EXCHANGE THEORY AND MARKETS

(114)

International Parity Conditions

(26)

Prices and Exchange Rates

(8)

Real World Example 4.1 Purchasing Power Parity: Burgers or Beans?

(3)

Real World Example 4.2 Deviations from Purchasing Power Parity in the 20th Century

(2)

Interest Rates and Exchange Rates

100

(8)

Forward Rate as an Unbiased Predictor of the Future Spot Rate

108

(1)

Prices, Interest Rates, and Exchange Rates in Equilibrium 84--85

109

(3)

Mini-Case: The Introduction of the Porsche 911 Carrera 4S Cabriolet

111

(1)

Summary of Learning Objectives

112

(1)

Questions

113

(1)

Problems

113

(3)

Internet Exercises

116

(1)

Foreign Exchange Rate Determination

117

(32)

The Asset Market Approach to Forecasting

119

(3)

Real World Example 5.1 Uruguay Infected

120

(2)

Disequilibrium: Exchange Rates in Emerging Markets

122

(1)

Illustrative Case: The Asian Crisis

122

(3)

Illustrative Case: The Russian Crisis of 1998

125

(3)

Illustrative Case: The Argentine Crisis of 2002

128

(5)

Forecasting in Practice

133

(9)

Real World Example 5.2 Forecasting the Dollar/Pound Exchange Rate (Cable) In Summer 2004

138

(1)

Mini-Case: Turkey's Kriz (B): Uncovered Interest Arbitrage

139

(3)

Summary of Learning Objectives

142

(1)

Questions

143

(1)

Problems

144

(3)

Internet Exercises

147

(2)

The Foreign Exchange Market

149

(24)

Geographical Extent of the Foreign Exchange Market

150

(1)

Functions of the Foreign Exchange Market

151

(1)

Market Participants

151

(3)

Real World Example 6.1 The Foreign Exchange Dealer's Day

153

(1)

Real World Example 6.2 Beware of Foreign Currency Trading Frauds

154

(1)

Transactions in the Interbank Market

154

(2)

Size of the Market

156

(1)

Foreign Exchange Rates and Quotations

157

(12)

Mini-Case: The Venezuelan Bolivar Black Market

166

(3)

Summary of Learning Objectives

169

(1)

Questions

169

(1)

Problems

170

(2)

Internet Exercises

172

(1)

Foreign Currency Derivatives

173

(30)

Foreign Currency Futures

174

(4)

Currency Options

178

(3)

Foreign Currency Speculation

181

(7)

Real World Example 7.1 Rogue Currency Trader at Allied Irish Bank

181

(7)

Option Pricing and Valuation

188

(4)

Prudence in Practice

192

(5)

Real World Example 7.2 A Select List of Derivative and Managerial Disasters

193

(1)

Mini-Case: Rogue Trader, Nicholas Leeson

193

(4)

Summary of Learning Objectives

197

(1)

Questions

198

(1)

Problems

198

(4)

Internet Exercises

202

(1)

PART 3 FOREIGN EXCHANGE EXPOSURE

203

(84)

Transaction Exposure

205

(30)

Types of Foreign Exchange Exposure

206

(1)

Why Hedge?

207

(3)

Real World Example 8.1 Amazon.com's Quest for Profits: The Role of Currency Gains/Losses

208

(2)

Measurement of Transaction Exposure

210

(3)

Trident's Transaction Exposure

213

(8)

Management of an Account Payable

221

(1)

Risk Management in Practice

222

(4)

Real World Example 8.2 Manipulation of Currency Gains and Losses

223

(2)

Mini-Case: Lufthansa's Purchase of Boeing 737s

225

(1)

Summary of Learning Objectives

226

(1)

Questions

227

(1)

Problems

227

(8)

Operating Exposure

235

(29)

Attributes of Operating Exposure

236

(2)

Illustrating Operating Exposure: Trident

238

(5)

Real World Example 9.1 Volvo Car

238

(5)

Strategic Management of Operating Exposure

243

(2)

Real World Example 9.2 Goodyear's Response to the Mexican Peso's Devaluation

244

(1)

Proactive Management of Operating Exposure

245

(8)

Contractual Approaches: Hedging the Unhedgeable

253

(6)

Mini-Case: Toyota's European Operating Exposure

254

(1)

Mini-Case: Porsche Exposed

255

(4)

Summary of Learning Objectives

259

(1)

Questions

259

(1)

Problems

260

(3)

Internet Exercises

263

(1)

Translation Exposure

264

(23)

Overview of Translation

265

(1)

Translation Methods

266

(5)

Translation Example: Trident Europe

271

(5)

Comparing Translation Exposure with Operating Exposure

276

(1)

Managing Translation Exposure

277

(6)

Real World Example 10.1 Hedging the Euro Away

279

(2)

Mini-Case: Lajolla Engineering Services

281

(2)

Summary of Learning Objectives

283

(1)

Questions

283

(1)

Problems

284

(1)

Internet Exercises

285

(2)

PART 4 FINANCING THE GLOBAL FIRM

287

(102)

Global Cost and Availability of Capital

289

(29)

Weighted Average Cost of Capital

291

(5)

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

296

(1)

The Link Between Cost and Availability of Capital

296

(4)

Real World Example 11.1 Market Liquidity

298

(2)

Illustrative Case: Novo Industri A/S (Novo)

300

(6)

Globalization of Securities Markets

306

(2)

Real World Example 11.2 Bang & Olufsen and Philips N.V.

307

(1)

The Cost of Capital for MNEs Compared with Capital for Domestic Firms

308

(1)

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

309

(3)

Mini-Case: Nestle: An Application of the International Capm

311

(1)

Summary of Learning Objectives

312

(1)

Questions

313

(1)

Problems

314

(3)

Internet Exercises

317

(1)

Sourcing Equity Globally

318

(20)

Designing a Strategy to Source Equity Globally

319

(3)

Foreign Equity Listing and Issuance

322

(3)

Effect of Cross-Listing and Equity Issuance on Share Price

325

(3)

Barriers to Cross-Listing and Selling Equity Abroad

328

(1)

Alternative Instruments to Source Equity in Global Markets

329

(4)

Real World Example 12.1 Private Equity in Argentina and the Argentine Crisis

332

(1)

Mini-Case: Deutsche Bank's Global Registered Shares

332

(1)

Summary of Learning Objectives

333

(1)

Questions

334

(1)

Problems

335

(2)

Internet Exercises

337

(1)

Financial Structure and International Debt

338

(26)

Optimal Financial Structure

339

(1)

Optimal Financial Structure and the MNE

340

(3)

Financial Structure of Foreign Subsidiaries

343

(5)

Real World Example 13.1 Equity Carve-Outs

344

(4)

International Debt Markets

348

(6)

Real World Example 13.2 Pricing and Structure of a Syndicated Eurocredit

350

(4)

Project Financing

354

(5)

Real World Example 13.3 Islamic Finance

356

(1)

Mini-Case: Tirstrup Biomechanics (Denmark): Raising Dollar Debt

357

(2)

Summary of Learning Objectives

359

(1)

Questions

360

(1)

Problems

361

(3)

Internet Exercises

363

(1)

Interest Rate and Currency Swaps

364

(25)

Defining Interest Rate Risk

365

(2)

Management of Interest Rate Risk

367

(8)

Trident Corporation: Swapping to Fixed Rates

375

(2)

Real World Example 14.1 Caveat Emptor, Procter & Gamble's Swaps

376

(1)

Currency Swaps

377

(1)

Trident Corporation: Swapping Floating Dollars into Fixed Rate Swiss Francs

378

(3)

Real World Example 14.2 Ecuadorian Debt-For-Development

379

(2)

Counterparty Risk

381

(1)

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

381

(3)

Mini-Case: Mcdonald's Corporation's British Pound Exposure

383

(1)

Summary of Learning Objectives

384

(1)

Questions

384

(1)

Problems

385

(2)

Internet Exercises

387

(2)

PART 5 FOREIGN INVESTMENT DECISIONS

389

(100)

International Portfolio Theory and Diversification

391

(21)

International Diversification and Risk

392

(3)

Real World Example 15.1 Should Fund Managers Hedge Currency Risk?

395

(1)

Internationalizing the Domestic Portfolio

395

(5)

National Markets and Asset Performance

400

(7)

Real World Example 15.2 Equity Market Crises in the Twentieth Century

401

(5)

Mini-Case: Strategic Currency Hedging

406

(1)

Summary of Learning Objectives

407

(1)

Questions

408

(1)

Problems

409

(2)

Internet Exercises

411

(1)

Foreign Direct Investment Theory and Strategy

412

(23)

The Theory of Comparative Advantage

413

(5)

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

418

(2)

Real World Example 16.1 Examples of Global Outsourcing of Comparative Advantage in Intellectual Skills

419

(1)

Sustaining and Transferring Competitive Advantage

420

(3)

The OLI Paradigm and Internalization

423

(1)

Deciding Where to Invest

424

(2)

How to Invest Abroad: Modes of Foreign Involvement

426

(5)

Real World Example 16.2 Keeping it in the Family: American Exports to and Imports from American-Owned Affiliates Abroad (Billions of US$)

427

(3)

Mini-Case: Benecol's Global Licensing Agreement

430

(1)

Summary of Learning Objectives

431

(1)

Questions

432

(1)

Problems

433

(1)

Internet Exercises

434

(1)

Political Risk Assessment and Management

435

(28)

Defining Political Risk

436

(1)

Assessing Political Risk

437

(2)

Firm-Specific Risks

439

(4)

Country-Specific Risks: Transfer Risk

443

(3)

Country-Specific Risks: Cultural and Institutional Risks

446

(5)

Real World Example 17.1 Enron International in India

451

(1)

Global-Specific Risks

451

(9)

Real World Example 17.2 International Supply Chain Security: Time is Money

454

(2)

Real World Example 17.3 Corporate Sustainability

456

(1)

Mini-Case: Globalization and Starbucks Coffee

456

(4)

Summary of Learning Objectives

460

(1)

Questions

460

(2)

Internet Exercises

462

(1)

Multinational Capital Budgeting

463

(26)

Complexities of Budgeting for a Foreign Project

464

(1)

Project Versus Parent Valuation

465

(2)

Illustrative Case: Cemex Enters Indonesia

467

(13)

Real Option Analysis

480

(3)

Mini-Case: Trident's Chinese Market Entry -- An Application of Real Option Analysis

481

(2)

Summary of Learning Objectives

483

(1)

Questions

484

(1)

Problems

484

(4)

Internet Exercises

488

(1)

PART 6 MANAGING MULTINATIONAL OPERATIONS

489

International Trade Finance

491

(28)

The Trade Relationship

492

(2)

The Trade Dilemma

494

(1)

Benefits of the System

495

(2)

Key Documents

497

(1)

Letter of Credit (L/C)

497

(3)

Draft

500

(1)

Bill of Lading (B/L)

501

(1)

Example: Documentation in a Typical Trade Transaction

502

(2)

Real World Example 19.1 The Letter of Credit Goes Online

504

(1)

Government Programs to Help Finance Exports

504

(2)

Trade Financing Alternatives

506

(3)

Forfaiting: Medium and Long-Term Financing

509

(5)

Mini-Case: Crosswell International's Precious Ultra-Thin Diapers

511

(3)

Summary of Learning Objectives

514

(1)

Questions

515

(1)

Problems

516

(2)

Internet Exercises

518

(1)

Multinational Tax Management

519

(33)

Tax Principles

520

(7)

Transfer Pricing

527

(3)

Real World Example 20.1 Over-and Under-Invoicing

528

(2)

Methods of Determining Transfer Prices

530

(2)

U.S. Taxation of Foreign Source Income

532

(7)

Tax-Haven Subsidiaries and International Offshore Financial Centers

539

(6)

Real World Example 20.2 The Activities of Offshore Financial Centers

541

(1)

Mini-Case: Stanley Works and Corporate Inversion

541

(4)

Summary of Learning Objectives

545

(1)

Questions

546

(2)

Problems

548

(3)

Internet Exercises

551

(1)

Working Capital Management

552

Trident Brazil's Operating Cycle

553

(2)

Trident's Repositioning Decisions

555

(1)

Constraints on Repositioning Funds

556

(1)

Conduits for Moving Funds by Unbundling Them

557

(1)

International Dividend Remittances

558

(1)

Net Working Capital

559

(7)

International Cash Management

566

(6)

Financing Working Capital

572

(5)

Mini-Case: Honeywell and Pakistan International Airways

575

(2)

Summary of Learning Objectives

577

(1)

Questions

578

(2)

Problems

580

(3)

Internet Exercises

583

Glossary

(1)

Index

Fundamentals Of Multinational Finance

9780321280312

0321280318

Summary

Table of Contents

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Fundamentals Of Multinational Finance

9780321280312

0321280318

Summary

Table of Contents

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