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Multinational Financial Management

Book Description

Multinational Financial Management, 10th Edition provides corporate managers with a conceptual framework within which the key financial decisions of the multinational firm can be analyzed. It contains charts and illustrations of corporate practice that are designed to highlight specific techniques. Numerous real-world examples and vignettes provide actual applications of financial concepts and theories. Seven longer illustrations of actual company practices appear at the end of key chapters to demonstrate different aspects of international financial management. Corporate managers will also benefit from the mini cases in each chapter that illustrate important concepts.

Table of Contents

  1. Cover Page
  2. Title Page
  3. Copyright
  4. Contents
  5. PREFACE
    1. APPROACH
    2. CHANGES TO THE TENTH EDITION
    3. PEDAGOGY
    4. ADDITIONAL RESOURCES
    5. THANKS
  6. SELECTED CURRENCIES AND SYMBOLS
  7. SYMBOL AND ACRONYMS
  8. PART I: ENVIRONMENT OF INTERNATIONAL FINANCIAL MANAGEMENT
    1. Chapter 1: Introduction: Multinational Enterprise and Multinational Financial Management
      1. 1.1 THE RISE OF THE MULTINATIONAL CORPORATION
      2. 1.2 THE INTERNATIONALIZATION OF BUSINESS AND FINANCE
      3. 1.3 MULTINATIONAL FINANCIAL MANAGEMENT: THEORY AND PRACTICE
      4. 1.4 OUTLINE OF THE BOOK
    2. Chapter 2: The Determination of Exchange Rates
      1. 2.1 SETTING THE EQUILIBRIUM SPOT EXCHANGE RATE
      2. 2.2 EXPECTATIONS AND THE ASSET MARKET MODEL OF EXCHANGE RATES
      3. 2.3 THE FUNDAMENTALS OF CENTRAL BANK INTERVENTION
      4. 2.4 THE EQUILIBRIUM APPROACH TO EXCHANGE RATES
      5. 2.5 SUMMARY AND CONCLUSIONS
    3. Chapter 3: The International Monetary System
      1. 3.1 ALTERNATIVE EXCHANGE RATE SYSTEMS
      2. 3.2 A BRIEF HISTORY OF THE INTERNATIONAL MONETARY SYSTEM
      3. 3.3 THE EUROPEAN MONETARY SYSTEM AND MONETARY UNION
      4. 3.4 EMERGING MARKET CURRENCY CRISES
      5. 3.5 SUMMARY AND CONCLUSIONS
    4. Chapter 4: Parity Conditions in International Finance and Currency Forecasting
      1. 4.1 ARBITRAGE AND THE LAW OF ONE PRICE
      2. 4.2 PURCHASING POWER PARITY
      3. 4.3 THE FISHER EFFECT
      4. 4.4 THE INTERNATIONAL FISHER EFFECT
      5. 4.5 INTEREST RATE PARITY THEORY
      6. 4.6 THE RELATIONSHIP BETWEEN THE FORWARD RATE AND THE FUTURE SPOT RATE
      7. 4.7 CURRENCY FORECASTING
      8. 4.8 SUMMARY AND CONCLUSIONS
    5. Chapter 5: The Balance of Payments and International Economic Linkages
      1. 5.1 BALANCE-OF-PAYMENTS CATEGORIES
      2. 5.2 THE INTERNATIONAL FLOW OF GOODS, SERVICES, AND CAPITAL
      3. 5.3 COPING WITH THE CURRENT-ACCOUNT DEFICIT
      4. 5.4 SUMMARY AND CONCLUSIONS
    6. Chapter 6: Country Risk Analysis
      1. 6.1 MEASURING POLITICAL RISK
      2. 6.2 ECONOMIC AND POLITICAL FACTORS UNDERLYING COUNTRY RISK
      3. 6.3 COUNTRY RISK ANALYSIS IN INTERNATIONAL LENDING
      4. 6.4 SUMMARY AND CONCLUSIONS
  9. PART II: FOREIGN EXCHANGE AND DERIVATIVES MARKETS
    1. Chapter 7: The Foreign Exchange Market
      1. 7.1 ORGANIZATION OF THE FOREIGN EXCHANGE MARKET
      2. 7.2 THE SPOT MARKET
      3. 7.3 THE FORWARD MARKET
      4. 7.4 SUMMARY AND CONCLUSIONS
    2. Chapter 8: Currency Futures and Options Markets
      1. 8.1 FUTURES CONTRACTS
      2. 8.2 CURRENCY OPTIONS
      3. 8.3 READING CURRENCY FUTURES AND OPTIONS PRICES
      4. 8.4 SUMMARY AND CONCLUSIONS
    3. Chapter 9: Swaps and Interest Rate Derivatives
      1. 9.1 INTEREST RATE AND CURRENCY SWAPS
      2. 9.2 INTEREST RATE FORWARDS AND FUTURES
      3. 9.3 STRUCTURED NOTES
      4. 9.4 CREDIT DEFAULT SWAPS
      5. 9.5 SUMMARY AND CONCLUSIONS
  10. PART III: FOREIGN EXCHANGE RISK MANAGEMENT
    1. Chapter 10: Measuring and Managing Translation and Transaction Exposure
      1. 10.1 ALTERNATIVE MEASURES OF FOREIGN EXCHANGE EXPOSURE
      2. 10.2 ALTERNATIVE CURRENCY TRANSLATION METHODS
      3. 10.3 TRANSACTION EXPOSURE
      4. 10.4 DESIGNING A HEDGING STRATEGY
      5. 10.5 MANAGING TRANSLATION EXPOSURE
      6. 10.6 MANAGING TRANSACTION EXPOSURE
      7. 10.7 SUMMARY AND CONCLUSIONS
    2. Chapter 11: Measuring and Managing Economic Exposure
      1. 11.1 FOREIGN EXCHANGE RISK AND ECONOMIC EXPOSURE
      2. 11.2 THE ECONOMIC CONSEQUENCES OF EXCHANGE RATE CHANGES
      3. 11.3 IDENTIFYING ECONOMIC EXPOSURE
      4. 11.4 CALCULATING ECONOMIC EXPOSURE
      5. 11.5 AN OPERATIONAL MEASURE OF EXCHANGE RISK
      6. 11.6 MANAGING OPERATING EXPOSURE
      7. 11.7 SUMMARY AND CONCLUSIONS
  11. PART IV: FINANCING THE MULTINATIONAL CORPORATION
    1. Chapter 12: International Financing and National Capital Markets
      1. 12.1 CORPORATE SOURCES AND USES OF FUNDS
      2. 12.2 NATIONAL CAPITAL MARKETS AS INTERNATIONAL FINANCIAL CENTERS
      3. 12.3 DEVELOPMENT BANKS
      4. 12.4 PROJECT FINANCE
      5. 12.5 SUMMARY AND CONCLUSIONS
    2. Chapter 13: The Euromarkets
      1. 13.1 THE EUROCURRENCY MARKET
      2. 13.2 EUROBONDS
      3. 13.3 NOTE ISSUANCE FACILITIES AND EURONOTES
      4. 13.4 EURO-COMMERCIAL PAPER
      5. 13.5 THE ASIACURRENCY MARKET
      6. 13.6 SUMMARY AND CONCLUSIONS
    3. Chapter 14: The Cost of Capital for Foreign Investments
      1. 14.1 THE COST OF EQUITY CAPITAL
      2. 14.2 THE WEIGHTED AVERAGE COST OF CAPITAL FOR FOREIGN PROJECTS
      3. 14.3 DISCOUNT RATES FOR FOREIGN INVESTMENTS
      4. 14.4 THE COST OF DEBT CAPITAL
      5. 14.5 ESTABLISHING A WORLDWIDE CAPITAL STRUCTURE
      6. 14.6 VALUING LOW-COST FINANCING OPPORTUNITIES
      7. 14.7 SUMMARY AND CONCLUSIONS
  12. PART V: FOREIGN INVESTMENT ANALYSIS
    1. Chapter 15: International Portfolio Investment
      1. 15.1 THE RISKS AND BENEFITS OF INTERNATIONAL EQUITY INVESTING
      2. 15.2 INTERNATIONAL BOND INVESTING
      3. 15.3 OPTIMAL INTERNATIONAL ASSET ALLOCATION
      4. 15.4 MEASURING THE TOTAL RETURN FROM FOREIGN PORTFOLIO INVESTING
      5. 15.5 MEASURING EXCHANGE RISK ON FOREIGN SECURITIES
      6. 15.6 SUMMARY AND CONCLUSIONS
    2. Chapter 16: Corporate Strategy and Foreign Direct Investment
      1. 16.1 THEORY OF THE MULTINATIONAL CORPORATION
      2. 16.2 THE STRATEGY OF MULTINATIONAL ENTERPRISE
      3. 16.3 DESIGNING A GLOBAL EXPANSION STRATEGY
      4. 16.4 SUMMARY AND CONCLUSIONS
    3. Chapter 17: Capital Budgeting for the Multinational Corporation
      1. 17.1 BASICS OF CAPITAL BUDGETING
      2. 17.2 ISSUES IN FOREIGN INVESTMENT ANALYSIS
      3. 17.3 FOREIGN PROJECT APPRAISAL: THE CASE OF INTERNATIONAL DIESEL CORPORATION
      4. 17.4 POLITICAL RISK ANALYSIS
      5. 17.5 GROWTH OPTIONS AND PROJECT EVALUATION
      6. 17.6 SUMMARY AND CONCLUSIONS
  13. PART VI: MULTINATIONAL WORKING CAPITAL MANAGEMENT
    1. Chapter 18: Financing Foreign Trade
      1. 18.1 PAYMENT TERMS IN INTERNATIONAL TRADE
      2. 18.2 DOCUMENTS IN INTERNATIONAL TRADE
      3. 18.3 FINANCING TECHNIQUES IN INTERNATIONAL TRADE
      4. 18.4 GOVERNMENT SOURCES OF EXPORT FINANCING AND CREDIT INSURANCE
      5. 18.5 COUNTERTRADE
      6. 18.6 SUMMARY AND CONCLUSIONS
    2. Chapter 19: Current Asset Management and Short-Term Financing
      1. 19.1 INTERNATIONAL CASH MANAGEMENT
      2. 19.2 ACCOUNTS RECEIVABLE MANAGEMENT
      3. 19.3 INVENTORY MANAGEMENT
      4. 19.4 SHORT-TERM FINANCING
      5. 19.5 SUMMARY AND CONCLUSIONS
    3. Chapter 20: Managing the Multinational Financial System
      1. 20.1 THE VALUE OF THE MULTINATIONAL FINANCIAL SYSTEM
      2. 20.2 INTERCOMPANY FUND-FLOW MECHANISMS: COSTS AND BENEFITS
      3. 20.3 DESIGNING A GLOBAL REMITTANCE POLICY
      4. 20.4 SUMMARY AND CONCLUSIONS
  14. GLOSSARY
  15. INDEX