Foundations of multinational financial management

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Title:

Personal Author:

Shapiro, Alan C.

Edition:

5th ed.

Publication Information:

Hoboken, N.J. : John Wiley & Sons, 2005

ISBN:

9780471563372

Subject Term:

International business enterprises -- Finance

Decision making

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Library	Item Barcode	Call Number	Material Type	Item Category 1	Status
Searching... PSZ JB	30000010070171	HG4027.5 S43 2005	Open Access Book	Book	Searching... Unknown

All too often, companies focus on the threats and risks inherent in venturing abroad. But multinational firms actually have unique opportunities that are not available to purely domestic firms. Now updated, revised, and reorganized, Alan Shapiro's Foundations of Multinational Financial Management, 5/e will help you take advantage of these valuable opportunities. Foundations emphasizes broad concepts and practices and provides a clear conceptual framework for analyzing key financial decisions in multinational firms. The text treats international financial management as a natural and logical extension of the principles learned in the foundations course in financial management.

Preface	p. xi
Chapter 1 Introduction: Multinational Enterprise and Multinational Financial Management	p. 1
1.1 The Rise of the Multinational Corporation	p. 2
1.2 The Internationalization of Business and Finance	p. 10
1.3 Multinational Financial Management: Theory and Practice	p. 16
1.4 Outline of This Book	p. 22
Questions	p. 24
Appendix 1A The Origins and Consequences of International Trade	p. 24
Part I Environment of International Financial Management
Chapter 2 The Determination of Exchange Rates	p. 32
2.1 Setting the Equilibrium Spot Exchange Rate	p. 33
2.2 Expectations and the Asset-Market Model of Exchange Rates	p. 37
2.3 Fundamentals of Central Bank Intervention	p. 52
Questions	p. 58
Problems	p. 61
Bibliography	p. 62
Chapter 3 The International Monetary System	p. 64
3.1 Alternative Exchange Rate Systems	p. 65
3.2 A Brief History of the International Monetary System	p. 68
3.3 The European Monetary System and Monetary Union	p. 79
3.4 Emerging Market Currency Crises	p. 89
3.5 Summary and Conclusions	p. 91
Questions	p. 92
Problems	p. 93
Bibliography	p. 94
Chapter 4 The Balance of Payments and International Economic Linkages	p. 95
4.1 Balance-of-Payments Categories	p. 96
4.2 The International Flow of Goods, Services, and Capital	p. 101
4.3 Coping with the Current-Account Deficit	p. 106
4.4 Summary and Conclusions	p. 115
Questions	p. 117
Problems	p. 118
Bibliography	p. 120
Chapter 5 Country Risk Analysis	p. 121
5.1 Measuring Political Risk	p. 122
5.2 Economic and Political Factors Underlying Country Risk	p. 127
5.3 Country Risk Analysis in International Banking	p. 138
5.4 Summary and Conclusions	p. 142
Questions	p. 142
Problems	p. 143
Bibliography	p. 145
Chapter 6 The Foreign Exchange Market	p. 146
6.1 Organization of the Foreign Exchange Market	p. 147
6.2 The Spot Market	p. 152
6.3 The Forward Market	p. 160
6.4 Summary and Conclusions	p. 164
Questions	p. 165
Problems	p. 165
Bibliography	p. 167
Chapter 7 Currency Futures and Options Markets	p. 168
7.1 Futures Contracts	p. 169
7.2 Currency Options	p. 174
7.3 Reading Currency Futures and Options Prices	p. 189
7.4 Summary and Conclusions	p. 191
Questions	p. 192
Problems	p. 193
Bibliography	p. 194
Chapter 8 Parity Conditions in International Finance and Currency Forecasting	p. 196
8.1 Arbitrage and the Law of One Price	p. 197
8.2 Purchasing Power Parity	p. 199
8.3 The Fisher Effect	p. 206
8.4 The International Fisher Effect	p. 213
8.5 Interest Rate Parity Theory	p. 217
8.6 The Relationship Between the Forward Rate and the Future Spot Rate	p. 222
8.7 Currency Forecasting	p. 225
8.8 Summary and Conclusions	p. 231
Questions	p. 233
Problems	p. 235
Bibliography	p. 237
Part I Case Studies	p. 238
Case I.1 Oil Levies: The Economic Implications	p. 238
Case I.2 President Carter Lectures the Foreign Exchange Markets	p. 238
Case I.3 Rescuing the Indonesian Rupiah with a Currency Board	p. 239
Case I.4 Brazil Fights a Real Battle	p. 243
Part II Foreign Exchange Risk Management
Chapter 9 Measuring Accounting Exposure	p. 251
9.1 Alternative Measures of Foreign Exchange Exposure	p. 252
9.2 Alternative Currency Translation Methods	p. 253
9.3 Statement of Financial Accounting Standards No. 8	p. 255
9.4 Statement of Financial Accounting Standards No. 52	p. 257
9.5 Transaction Exposure	p. 262
9.6 Accounting Practice and Economic Reality	p. 262
9.7 Summary and Conclusions	p. 265
Questions	p. 265
Problems	p. 265
Bibliography	p. 266
Chapter 10 Managing Accounting Exposure	p. 268
10.1 Designing a Hedging Strategy	p. 269
10.2 Managing Transaction Exposure	p. 276
10.3 Managing Translation Exposure	p. 291
10.4 Illustration: Managing Transaction Exposure for the Toronto Blue Jays	p. 293
10.5 Summary and Conclusions	p. 294
Questions	p. 295
Problems	p. 296
Bibliography	p. 299
Chapter 11 Measuring and Managing Economic Exposure	p. 300
11.1 Foreign Exchange Risk and Economic Exposure	p. 301
11.2 The Economic Consequences of Exchange Rate Changes	p. 304
11.3 Identifying Economic Exposure	p. 308
11.4 Calculating Economic Exposure	p. 310
11.5 Managing Operating Exposure	p. 315
11.6 Illustration: Avon Is Calling in Asia	p. 325
11.7 Summary and Conclusions	p. 326
Questions	p. 327
Problems	p. 328
Bibliography	p. 331
Part II Case Studies	p. 333
Case II.1 Rolls-Royce Limited	p. 333
Case II.2 The Mexican Peso	p. 333
Part III Financing Foreign Operations
Chapter 12 International Financing and International Financial Markets	p. 335
12.1 Corporate Sources and Uses of Funds	p. 336
12.2 National Capital Markets as International Financial Centers	p. 342
12.3 The Euromarkets	p. 355
12.4 Development Banks	p. 373
12.5 Project Finance	p. 376
12.6 Summary and Conclusions	p. 377
Questions	p. 374
Problems	p. 379
Bibliography	p. 380
Chapter 13 Special Financing and Interest Rate Risk Management Vehicles	p. 381
13.1 Interest Rate and Currency Swaps	p. 382
13.2 Interest Rate Forwards and Futures	p. 389
13.3 Valuing Low-Cost Financing Opportunities	p. 392
13.4 Summary and Conclusions	p. 396
Questions	p. 397
Problems	p. 397
Bibliography	p. 399
Chapter 14 The Cost of Capital for Foreign Investments	p. 400
14.1 The Cost of Equity Capital	p. 401
14.2 The Weighted Cost of Capital for Foreign Projects	p. 402
14.3 Discount Rates for Foreign Investments	p. 399
14.4 The Cost of Debt Capital	p. 412
14.5 Establishing a Worldwide Capital Structure	p. 414
14.6 Summary and Conclusions	p. 422
Questions	p. 423
Problems	p. 425
Bibliography	p. 425
Part III Case Studies	p. 427
Case III.1 Plano Cruzado	p. 427
Case III.2 Multinational Manufacturing, Inc.	p. 427
Part IV Foreign Investment Analysis
Chapter 15 International Portfolio Investment	p. 431
15.1 The Benefits of International Equity Investing	p. 432
15.2 International Bond Investing	p. 445
15.3 Optimal International Asset Allocation	p. 446
15.4 Measuring the Total Return from Foreign Portfolio Investing	p. 447
15.5 Measuring Exchange Risk on Foreign Securities	p. 448
15.6 Summary and Conclusions	p. 450
Questions	p. 450
Problems	p. 451
Bibliography	p. 453
Chapter 16 Corporate Strategy and Foreign Direct Investment	p. 455
16.1 The Process of Overseas Expansion	p. 456
16.2 Theory of the Multinational Corporation	p. 458
16.3 The Strategy of Multinational Enterprise	p. 460
16.4 Designing a Global Expansion Strategy	p. 469
16.4 Summary and Conclusions	p. 472
Questions	p. 473
Problems	p. 474
Bibliography	p. 475
Chapter 17 Capital Budgeting for the Multinational Corporation	p. 477
17.1 Basics of Capital Budgeting	p. 478
17.2 Issues in Foreign Investment Analysis	p. 484
17.3 Foreign Project Appraisal: The Case of International Diesel Corporation	p. 487
17.4 Political Risk Analysis	p. 496
17.5 Growth Options and Project Evaluation	p. 498
17.6 Summary and Conclusions	p. 502
Questions	p. 502
Problems	p. 503
Bibliography	p. 504
Appendix 17A Managing Political Risk	p. 505
Part IV Case Studies	p. 509
Case IV.1 The International Machine Corporation	p. 509
Case IV.2 Euro Disneyland	p. 510
Part V Multinational Working Capital Management
Chapter 18 Financing Foreign Trade	p. 517
18.1 Payment Terms in International Trade	p. 518
18.2 Documents in International Trade	p. 526
18.3 Financing Techniques in International Trade	p. 528
18.4 Government Sources of Export Financing and Credit Insurance	p. 532
18.5 Countertrade	p. 537
18.6 Summary and Conclusions	p. 540
Questions	p. 541
Problems	p. 542
Bibliography	p. 543
Chapter 19 Current Asset Management and Short-Term Financing	p. 544
19.1 International Cash Management	p. 545
19.2 Accounts Receivable Management	p. 558
19.3 Inventory Management	p. 560
19.4 Short-term Financing	p. 562
19.5 Summary and Conclusions	p. 572
Questions	p. 573
Problems	p. 573
Bibliography	p. 575
Chapter 20 Managing the Multinational Financial System	p. 577
20.1 The Value of the Multinational Financial System	p. 578
20.2 Intercompany Fund Flow Mechanisms: Costs and Benefits	p. 581
20.3 Designing a Global Remittance Policy	p. 598
20.4 Summary and Conclusions	p. 602
Questions	p. 603
Problems	p. 603
Bibliography	p. 605
Glossary	p. 607
Index	p. 623

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