Multinational Financial Management

SYMBOL AND ACRONYMS

ah	Expected real return on home currency loan
af	Expected real return on a foreign currency loan
ADR	American depository receipt
APV	Adjusted present value
B/L	Bill of lading
β	Beta coefficient, a measure of an asset's riskiness
β*	All-equity beta
βe	Levered β
C1	Local currency cash flows in period t
C	Cost
C(E)	Price of a foreign currency call option
d	Amount of currency devalution
D	Forward discount
Df	Amount of foreign currency debt
et	Nominal exchange rate at time t
e′t	Real exchange rate at time t
E	(a) Exercise price on a call option or (b) Amount of equity
Ef	Foreign subsidiary retained earnings
ft	t-period forward exchange rate
g	(a) Expected dividend growth rate or
(b) Expected rate of foreign currency appreciation against the dollar
HC	Home currency
if	(a) Expected rate of foreign inflation per period or
(b) Before-tax cost of foreign debt
ih	Expected rate of home country inflation per period
id	Before-tax cost of domestic debt
Io	Initial investment
IRPT	Interest rate parity theory
k	Cost of capital
k0	Weighted cost of capital
ke	Cost of equity capital given the firm's degree of leverage
k1	Weighted cost of capital for a project
k*	Cost of equity capital if all equity financed
L	Parent's target debt ratio
LC	Local currency
L/C	Letter of credit
LDC	Less-developed country