International Financial Management

Description

Prepare for success in international finance with this best-selling book's effective presentation of in-depth theory and practical applications. INTERNATIONAL FINANCIAL MANAGEMENT, 11E builds on the fundamental principles of corporate finance to provide the timely information and contemporary insights needed to prosper in today's global business environment. This book discusses a wide range of managerial topics using a strong corporate perspective. This edition highlights financial reform and its impact on the international finance today. An emphasis on the most recent financial changes and industry trends further prepares readers to understand and effectively manage within the dynamic field of international finance. Cover Title Page Copyright Contents Preface About the Author PART 1: The International Financial Environment 1: MULTINATIONAL FINANCIAL MANAGEMENT: AN OVERVIEW Managing the MNC Why Firms Pursue International Business How Firms Engage in International Business Valuation Model for an MNC Organization of the Text Summary Point Counter-Point: Should an MNC Reduce Its Ethical Standards to Compete Internationally? Self-Test Questions and Applications Blades, Inc. Case: Decision to Expand Internationally Small Business Dilemma: Developing a Multinational Sporting Goods Corporation Internet/Excel Exercises Online Articles with Real World Examples Term Paper on the International Credit Crisis 2: INTERNATIONAL FLOW OF FUNDS Balance of Payments Growth in International Trade Factors Affecting International Trade Flows International Capital Flows Agencies that Facilitate International Flows Summary Point Counter-Point: Should Trade Restrictions Be Used to Influence Human Rights Issues? Self-Test Questions and Applications Blades, Inc. Case: Exposure to International Flow of Funds Small Business Dilemma: Identifying Factors That Will Affect the Foreign Demand at the Sports Exports Company Internet/Excel Exercises Online Articles with Real World Examples 3: INTERNATIONAL FINANCIAL MARKETS Foreign Exchange Market International Money Market Summary Point Counter-Point: Should Firms That Go Public Engage in International Offerings Self-Test Questions and Applications Blades, Inc. Case: Decisions to Use International Financial Markets Small Business Dilemma: Use of the Foreign Exchange Markets by the Sports Exports Company Internet/Excel Exercises Online Articles with Real World Examples Appendix 3: Investing in International Financial Markets 4: EXCHANGE RATE DETERMINATION Measuring Exchange Rate Movements Exchange Rate Equilibrium Factors That Influence Exchange Rates Movements in Cross Exchange Rates Anticipation of Exchange Rate Movements Summary Point Counter-Point: How Can Persistently Weak Currencies Be Stabilized? Self-Test Questions and Applications Blades, Inc. Case: Assessment of Future Exchange Rate Movements Small Business Dilemma: Assessment by the Sports Exports Company of Factors That Affect the British Pound’s Value Internet/Excel Exercises Online Articles with Real World Examples 5: CURRENCY DERIVATIVES Forward Market Currency Futures Market Currency Options Market Currency Call Options Currency Put Options Summary Point Counter-Point: Should Speculators Use Currency Futures or Options? Self-Test Questions and Applications Blades, Inc. Case: Use of Currency Derivative Instruments Small Business Dilemma: Use of Currency Futures and Options by the Sports Exports Company Internet/Excel Exercises Online Articles with Real World Examples Appendix 5A: Currency Option Pricing Appendix 5B: Currency Option Combinations Part 1 Integrative Problem: The International Financial Environment PART 2: Exchange Rate Behavior 6: GOVERNMENT INFLUENCE ON EXCHANGE RATES Exchange Rate Systems A Single European Currency Government Intervention Intervention as a Policy Tool Summary Point Counter-Point: Should China Be Forced to Alter the Value of Its Currency? Self-Test Questions and Applications Blades, Inc. Case: Assessment of Government Influence on Exchange Rates Small Business Dilemma: Assessment of Central Bank Intervention by the Sports Exports Company Internet/Excel Exercises Online Articles with Real World Examples Appendix 6: Government Intervention during the Asian Crisis 7: INTERNATIONAL ARBITRAGE AND INTEREST RATE PARITY International Arbitrage Interest Rate Parity (IRP) Variation in Forward Premiums Summary Point Counter-Point: Does Arbitrage Destabilize Foreign Exchange Markets? Self-Test Questions and Applications Blades, Inc. Case: Assessment of Potential Arbitrage Opportunities Small Business Dilemma: Assessment of Prevailing Spot and Forward Rates by the Sports Exports Company Internet/Excel Exercise Online Articles with Real World Examples 8: RELATIONSHIPS AMONG INFLATION, INTEREST RATES, AND EXCHANGE RATES Purchasing Power Parity (PPP) International Fisher Effect (IFE) Comparison of the IRP, PPP, and IFE Summary Point Counter-Does PPP Eliminate Concerns about Long-Term Exchange Rate Risk? Self-Test Questions and Applications Blades, Inc. Case: Assessment of Purchasing Power Parity Small Business Dilemma: Assessment of the IFE by the Sports Exports Company Internet/Excel Exercises Online Articles with Real World Examples Part 2 Integrative Problem: Exchange Rate Behavior Midterm Self-Exam PART 3: Exchange Rate Risk Management 9: FORECASTING EXCHANGE RATES Why Firms Forecast Exchange Rates Forecasting Techniques Forecast Error Using Interval Forecasts Summary Point Counter-Point: Which Exchange Rate Forecast Technique Should MNCs Use? Self-Test Questions and Applications Blades, Inc. Case: Forecasting Exchange Rates Small Business Dilemma: Exchange Rate Forecasting by the Sports Exports Company Internet/Excel Exercises Online Articles with Real World Examples 10: MEASURING EXPOSURE TO EXCHANGE RATE FLUCTUATIONS Relevance of Exchange Rate Risk Transaction Exposure Economic Exposure Translation Exposure Summary Point Counter-Point: Should Investors Care about an MNC’s Translation Exposure? Self-Test Questions and Applications Blades, Inc. Case: Assessment of Exchange Rate Exposure Small Business Dilemma: Assessment of Exchange Rate Exposure by the Sports Exports Company Internet/Excel Exercises Online Articles with Real World Examples 11: MANAGING TRANSACTION EXPOSURE Policies for Hedging Transaction Exposure Hedging Exposure to Payables Hedging Exposure to Receivables Limitations of Hedging Alternative Hedging Techniques Summary Point Counter-Point: Should an MNC Risk Overhedging? Self-Test Questions and Applications Blades, Inc. Case: Management of Transaction Exposure Small Business Dilemma: Hedging Decisions by the Sports Exports Company Internet/Excel Exercises Online Articles with Real World Examples Appendix 11: Nontraditional Hedging Techniques 12: MANAGING ECONOMIC EXPOSURE AND TRANSLATION EXPOSURE Managing Economic Exposure A Case on Hedging Economic Exposure Hedging Exposure to Fixed Assets Managing Translation Exposure Summary Point Counter-Point: Can an MNC Reduce the Impact of Translation Exposure by Communicating? Self-Test Questions and Applications Blades, Inc. Case: Assessment of Economic Exposure Small Business Dilemma: Hedging the Sports Exports Company’s Economic Exposure to Exchange Rate Risk Internet/Excel Exercises Online Articles with Real World Examples Part 3 Integrative Problem: Exchange Risk Management PART 4: Long-Term Asset and Liability Management 13: DIRECT FOREIGN INVESTMENT Motives for Direct Foreign Investment Benefits of International Diversification Host Government Views of DFI Summary Point Counter-Point: Should MNCs Avoid DFI in Countries with Liberal Child Labor Laws? Self-Test Questions and Applications Blades, Inc. Case: Consideration of Direct Foreign Investment Small Business Dilemma: Direct Foreign Investment Decision by the Sports Exports Company Internet/Excel Exercises Online Articles with Real World Examples 14: MULTINATIONAL CAPITAL BUDGETING Subsidiary versus Parent Perspective Input for Multinational Capital Budgeting Multinational Capital Budgeting Example Other Factors to Consider Adjusting Project Assessment for Risk Summary Point Counter-Point: Should MNCs Use Forward Rates to Estimate Dollar Cash Flows of Foreign Projects? Self-Test Questions and Applications Blades, Inc. Case: Decision by Blades, Inc., to Invest in Thailand Small Business Dilemma: Multinational Capital Budgeting by the Sports Exports Company Internet/Excel Exercises Online Articles with Real World Examples Appendix 14: Incorporating International Tax Law in Multinational Capital Budgeting 15: INTERNATIONAL CORPORATE GOVERNANCE AND CONTROL International Corporate Governance International Corporate Control Factors Affecting Target Valuation Example of the Valuation Process Disparity in Foreign Target Valuations Other Corporate Control Decisions Control Decisions as Real Options Summary Point Counter-Point: Can a Foreign Target Be Assessed Like Any Other Asset? Self-Test Questions and Applications Blades, Inc. Case: Assessment of an Acquisition in Thailand Small Business Dilemma: Multinational Restructuring by the Sports Exports Company Internet/Excel Exercises Online Articles with Real World Examples 16: COUNTRY RISK ANALYSIS Country Risk Characteristics Measuring Country Risk Incorporating Risk in Capital Budgeting Preventing Host Government Takeovers Summary Point Counter-Point: Does Country Risk Matter for U.S. Projects? Self-Test Questions and Applications Blades, Inc. Case: Country Risk Assessment Small Business Dilemma: Country Risk Analysis at the Sports Exports Company Internet/Excel Exercise Online Articles with Real World Examples 17: MULTINATIONAL CAPITAL STRUCTURE AND COST OF CAPITAL Components of Capital The MNC's Capital Structure Decision Subsidiary versus Parent Capital Structure Decisions Multinational Cost of Capital Cost of Capital across Countries Summary Point Counter-Point: Should a Reduced Tax Rate on Dividends Affect an MNC’s Capital Structure? Self-Test Questions and Applications Blades, Inc. Case: Assessment of Cost of Capital Small Business Dilemma: Multinational Capital Structure Decision at the Sports Exports Company Internet/Excel Exercise Online Articles with Real World Examples 18: LONG-TERM DEBT FINANCING Financing to Match the Inflow Currency Debt Denomination Decision by Subsidiaries Debt Maturity Decision Fixed versus Floating Rate Debt Decision Summary Point Counter-Point: Will Currency Swaps Result in Low Financing Costs? Self-Test Questions and Applications Blades, Inc. Case: Use of Long-Term Financing Small Business Dilemma: Long-Term Financing Decision by the Sports Exports Company Internet/Excel Exercises Online Articles with Real World Examples Part 4 Integrative Problem: Long-Term Asset and Liability Management PART 5: Short-Term Asset and Liability Management 19: FINANCING INTERNATIONAL TRADE Payment Methods for International Trade Trade Finance Methods Agencies that Motivate International Trade Summary Point Counter-Point: Do Agencies That Facilitate International Trade Prevent Free Trade? Self-Test Questions and Applications Blades, Inc. Case: Assessment of International Trade Financing in Thailand Small Business Dilemma: Ensuring Payment for Products Exported by the Sports Exports Company Internet/Excel Exercise Online Articles with Real World Examples 20: SHORT-TERM FINANCING Sources of Foreign Financing Financing with a Foreign Currency Determining the Effective Financing Rate Criteria Considered in the Financing Decision Actual Results from Foreign Financing Financing with a Portfolio of Currencies Summary Point Counter-Point: Do MNCs Increase Their Risk When Borrowing Foreign Currencies? Self-Test Questions and Applications Blades, Inc. Case: Use of Foreign Short-Term Financing Small Business Dilemma: Short-Term Financing by the Sports Exports Company Internet/Excel Exercises Online Articles with Real World Examples 21: INTERNATIONAL CASH MANAGEMENT Multinational Working Capital Management Centralized Cash Management Optimizing Cash Flows Investing Excess Cash Summary Point Counter-Point: Should Interest Rate Parity Prevent MNCs from Investing in Foreign Currencies? Self-Test Questions and Applications Blades, Inc. Case: International Cash Management Small Business Dilemma: Cash Management at the Sports Exports Company Internet/Excel Exercises Online Articles with Real World Examples Appendix 21: Investing in a Portfolio of Currencies Part 5 Integrative Problem: Short-Term Asset and Liability Management Final Self-Exam Appendix A: Answers to Self-Test Questions Appendix B: Supplemental Cases Appendix C: Using Excel to Conduct Analysis Appendix D: International Investing Project Appendix E: Discussion in the Boardroom Glossary Index