An Introduction to Multinational Enterprises and International Finance (WEEK 1) â€“ CHAPTER 1&2
SLIDE | NOTES |
3 | * There is a continuum of business environments from very similar to very different. * The term â€œmultinationalâ€ implies â€œcross-border.â€ However, multinational financial management can take place within a nationâ€™s borders (e.g., Canada or Belgium) or even outside any nationâ€™s borders (e.g., external Eurocurrency markets) as businesses interact with different cultures or social, legal, economic, or political environments. * While we take the perspective of the financial manager of a multinational corporation, this framework works just as well for ...view middle of the document...
g., operating costs, financial costs, taxes, costs of financial distress)The MNC has more flexibility than domestic firms in the timing and location of its investments (ala real options in Chapter 17) * The objective of financial policy is to maximize firm value by minimizing the cost of capital given the firmâ€™s investments. * The amount and type of debt (including the currency of denomination) influences the cost of capital * Hedging and risk management activities also influence capital costsMNCâ€™s have more flexibility than domestic firms in the timing and location (e.g., currency of denomination) of its financing choices. |
17 | Briefly explain three theories which can be used to identify the reasons for international business? |
19 | â€œProduct life cycle can be used to identify the various stages of internationalizationâ€. Explain. |
21 | Explain three cost related motives of doing international business. |
22 | * What factors causes some firms to become more international than others? * Name and briefly explain two mode of doing business in other countries. * List and briefly explain the advantages and disadvantages of direct foreign investment and licensing. |
23 | Explain three different forms of risk which multinational face. |
24 | Briefly explain the coverage of the international financial management. |
25 | Name and explain specific cash flows related with MNC. |
26 | Identify and briefly explain the factors affecting to the value of international investments |
27 | * Differentiate risk from risk exposure *...