Soumettre la recherche
Mettre en ligne
Lecture15.ppt
•
Télécharger en tant que PPT, PDF
•
0 j'aime
•
5 vues
S
ssuser0ff30f1
Suivre
com
Lire moins
Lire la suite
Business
Signaler
Partager
Signaler
Partager
1 sur 18
Télécharger maintenant
Recommandé
chap018 (1).ppt
chap018 (1).ppt
Luvnica Verma, Ph.D.
Hedging Foreign Exchange Exposures.ppt
Hedging Foreign Exchange Exposures.ppt
Simon Grima
Implication of Exchange rates on Businesses
Implication of Exchange rates on Businesses
Pranab Choudhary
15. forex_M&A.pptx
15. forex_M&A.pptx
IMRANBASHA67
Management of Transaction Exposure IoBM 1.pptx
Management of Transaction Exposure IoBM 1.pptx
HinaHadi1
PPT.pptx
PPT.pptx
GirishGarg20
International business
International business
james Thomas
Int rate and swaps
Int rate and swaps
Nits Kedia
Recommandé
chap018 (1).ppt
chap018 (1).ppt
Luvnica Verma, Ph.D.
Hedging Foreign Exchange Exposures.ppt
Hedging Foreign Exchange Exposures.ppt
Simon Grima
Implication of Exchange rates on Businesses
Implication of Exchange rates on Businesses
Pranab Choudhary
15. forex_M&A.pptx
15. forex_M&A.pptx
IMRANBASHA67
Management of Transaction Exposure IoBM 1.pptx
Management of Transaction Exposure IoBM 1.pptx
HinaHadi1
PPT.pptx
PPT.pptx
GirishGarg20
International business
International business
james Thomas
Int rate and swaps
Int rate and swaps
Nits Kedia
Int rate and swaps
Int rate and swaps
StudsPlanet.com
Financial management
Financial management
Maruf Ahmed
Future markets and contracts
Future markets and contracts
Amber Fatima
International financial management ppt @ bec doms bagalkot mba finance
International financial management ppt @ bec doms bagalkot mba finance
Babasab Patil
chap022.ppt
chap022.ppt
narman1402
Meeting 11 - International financial management (Financial Management)
Meeting 11 - International financial management (Financial Management)
Albina Gaisina
Selecting Investments in a Global Market ch03.pptx
Selecting Investments in a Global Market ch03.pptx
FamiFamz1
Mazda 0321286375 2009 Presentation
Mazda 0321286375 2009 Presentation
CardinaleWay Mazda
Chapter01
Chapter01
6268878
International financial markets
International financial markets
jainagawat
hedging.pptx
hedging.pptx
DrSurajitDas2
Module 1_IF_DS_2021_22.pptx
Module 1_IF_DS_2021_22.pptx
Dhrupal Tripathi
Financial forces in international business2
Financial forces in international business2
ajikesh
international financial management
international financial management
samansari22
Advanced finance management
Advanced finance management
Lê Xinh
International Financial Market.ppt
International Financial Market.ppt
Mobin26
INTEREST RATE FORECATING AND HEDGING SWAPS, FINANCIAL FUTURES AND OPTIONS IS ...
INTEREST RATE FORECATING AND HEDGING SWAPS, FINANCIAL FUTURES AND OPTIONS IS ...
MengsongNguon
interest rate is a function to calculate finding profit of investment
interest rate is a function to calculate finding profit of investment
MengsongNguon
BUSS5251Topic 8(2).ppt
BUSS5251Topic 8(2).ppt
arrywidodo
BUSS5251Topic 8(2).ppt
BUSS5251Topic 8(2).ppt
MinbiyewMekonnen
Presentation.pptx
Presentation.pptx
ssuser0ff30f1
business management.pptx
business management.pptx
ssuser0ff30f1
Contenu connexe
Similaire à Lecture15.ppt
Int rate and swaps
Int rate and swaps
StudsPlanet.com
Financial management
Financial management
Maruf Ahmed
Future markets and contracts
Future markets and contracts
Amber Fatima
International financial management ppt @ bec doms bagalkot mba finance
International financial management ppt @ bec doms bagalkot mba finance
Babasab Patil
chap022.ppt
chap022.ppt
narman1402
Meeting 11 - International financial management (Financial Management)
Meeting 11 - International financial management (Financial Management)
Albina Gaisina
Selecting Investments in a Global Market ch03.pptx
Selecting Investments in a Global Market ch03.pptx
FamiFamz1
Mazda 0321286375 2009 Presentation
Mazda 0321286375 2009 Presentation
CardinaleWay Mazda
Chapter01
Chapter01
6268878
International financial markets
International financial markets
jainagawat
hedging.pptx
hedging.pptx
DrSurajitDas2
Module 1_IF_DS_2021_22.pptx
Module 1_IF_DS_2021_22.pptx
Dhrupal Tripathi
Financial forces in international business2
Financial forces in international business2
ajikesh
international financial management
international financial management
samansari22
Advanced finance management
Advanced finance management
Lê Xinh
International Financial Market.ppt
International Financial Market.ppt
Mobin26
INTEREST RATE FORECATING AND HEDGING SWAPS, FINANCIAL FUTURES AND OPTIONS IS ...
INTEREST RATE FORECATING AND HEDGING SWAPS, FINANCIAL FUTURES AND OPTIONS IS ...
MengsongNguon
interest rate is a function to calculate finding profit of investment
interest rate is a function to calculate finding profit of investment
MengsongNguon
BUSS5251Topic 8(2).ppt
BUSS5251Topic 8(2).ppt
arrywidodo
BUSS5251Topic 8(2).ppt
BUSS5251Topic 8(2).ppt
MinbiyewMekonnen
Similaire à Lecture15.ppt
(20)
Int rate and swaps
Int rate and swaps
Financial management
Financial management
Future markets and contracts
Future markets and contracts
International financial management ppt @ bec doms bagalkot mba finance
International financial management ppt @ bec doms bagalkot mba finance
chap022.ppt
chap022.ppt
Meeting 11 - International financial management (Financial Management)
Meeting 11 - International financial management (Financial Management)
Selecting Investments in a Global Market ch03.pptx
Selecting Investments in a Global Market ch03.pptx
Mazda 0321286375 2009 Presentation
Mazda 0321286375 2009 Presentation
Chapter01
Chapter01
International financial markets
International financial markets
hedging.pptx
hedging.pptx
Module 1_IF_DS_2021_22.pptx
Module 1_IF_DS_2021_22.pptx
Financial forces in international business2
Financial forces in international business2
international financial management
international financial management
Advanced finance management
Advanced finance management
International Financial Market.ppt
International Financial Market.ppt
INTEREST RATE FORECATING AND HEDGING SWAPS, FINANCIAL FUTURES AND OPTIONS IS ...
INTEREST RATE FORECATING AND HEDGING SWAPS, FINANCIAL FUTURES AND OPTIONS IS ...
interest rate is a function to calculate finding profit of investment
interest rate is a function to calculate finding profit of investment
BUSS5251Topic 8(2).ppt
BUSS5251Topic 8(2).ppt
BUSS5251Topic 8(2).ppt
BUSS5251Topic 8(2).ppt
Plus de ssuser0ff30f1
Presentation.pptx
Presentation.pptx
ssuser0ff30f1
business management.pptx
business management.pptx
ssuser0ff30f1
Rural Economy.pptx
Rural Economy.pptx
ssuser0ff30f1
Capital Budgeting-S.pptx
Capital Budgeting-S.pptx
ssuser0ff30f1
9780273713654_pp18.ppt
9780273713654_pp18.ppt
ssuser0ff30f1
Export incentives.pptx
Export incentives.pptx
ssuser0ff30f1
UNIT-2-Income-from-salary.pptx
UNIT-2-Income-from-salary.pptx
ssuser0ff30f1
market segement.ppt
market segement.ppt
ssuser0ff30f1
12580687.ppt
12580687.ppt
ssuser0ff30f1
buying behaviour.ppt
buying behaviour.ppt
ssuser0ff30f1
SCMMM.ppt
SCMMM.ppt
ssuser0ff30f1
chap8.ppt
chap8.ppt
ssuser0ff30f1
UNIT 1.pptx
UNIT 1.pptx
ssuser0ff30f1
Plus de ssuser0ff30f1
(13)
Presentation.pptx
Presentation.pptx
business management.pptx
business management.pptx
Rural Economy.pptx
Rural Economy.pptx
Capital Budgeting-S.pptx
Capital Budgeting-S.pptx
9780273713654_pp18.ppt
9780273713654_pp18.ppt
Export incentives.pptx
Export incentives.pptx
UNIT-2-Income-from-salary.pptx
UNIT-2-Income-from-salary.pptx
market segement.ppt
market segement.ppt
12580687.ppt
12580687.ppt
buying behaviour.ppt
buying behaviour.ppt
SCMMM.ppt
SCMMM.ppt
chap8.ppt
chap8.ppt
UNIT 1.pptx
UNIT 1.pptx
Dernier
Dr. Admir Softic_ presentation_Green Club_ENG.pdf
Dr. Admir Softic_ presentation_Green Club_ENG.pdf
Admir Softic
The Abortion pills for sale in Qatar@Doha [+27737758557] []Deira Dubai Kuwait
The Abortion pills for sale in Qatar@Doha [+27737758557] []Deira Dubai Kuwait
daisycvs
Pre Engineered Building Manufacturers Hyderabad.pptx
Pre Engineered Building Manufacturers Hyderabad.pptx
Roofing Contractor
Falcon Invoice Discounting: Empowering Your Business Growth
Falcon Invoice Discounting: Empowering Your Business Growth
Falcon investment
Lucknow Housewife Escorts by Sexy Bhabhi Service 8250092165
Lucknow Housewife Escorts by Sexy Bhabhi Service 8250092165
meghakumariji156
Falcon Invoice Discounting: The best investment platform in india for investors
Falcon Invoice Discounting: The best investment platform in india for investors
Falcon Invoice Discounting
Al Mizhar Dubai Escorts +971561403006 Escorts Service In Al Mizhar
Al Mizhar Dubai Escorts +971561403006 Escorts Service In Al Mizhar
allensay1
Marel Q1 2024 Investor Presentation from May 8, 2024
Marel Q1 2024 Investor Presentation from May 8, 2024
Marel
HomeRoots Pitch Deck | Investor Insights | April 2024
HomeRoots Pitch Deck | Investor Insights | April 2024
Hector Del Castillo, CPM, CPMM
SEO Case Study: How I Increased SEO Traffic & Ranking by 50-60% in 6 Months
SEO Case Study: How I Increased SEO Traffic & Ranking by 50-60% in 6 Months
IndeedSEO
Berhampur 70918*19311 CALL GIRLS IN ESCORT SERVICE WE ARE PROVIDING
Berhampur 70918*19311 CALL GIRLS IN ESCORT SERVICE WE ARE PROVIDING
pr788182
How to Get Started in Social Media for Art League City
How to Get Started in Social Media for Art League City
Eric T. Tung
Quick Doctor In Kuwait +2773`7758`557 Kuwait Doha Qatar Dubai Abu Dhabi Sharj...
Quick Doctor In Kuwait +2773`7758`557 Kuwait Doha Qatar Dubai Abu Dhabi Sharj...
daisycvs
Nashik Call Girl Just Call 7091819311 Top Class Call Girl Service Available
Nashik Call Girl Just Call 7091819311 Top Class Call Girl Service Available
pr788182
GUWAHATI 💋 Call Girl 9827461493 Call Girls in Escort service book now
GUWAHATI 💋 Call Girl 9827461493 Call Girls in Escort service book now
kapoorjyoti4444
Uneak White's Personal Brand Exploration Presentation
Uneak White's Personal Brand Exploration Presentation
uneakwhite
PARK STREET 💋 Call Girl 9827461493 Call Girls in Escort service book now
PARK STREET 💋 Call Girl 9827461493 Call Girls in Escort service book now
kapoorjyoti4444
Arti Languages Pre Seed Teaser Deck 2024.pdf
Arti Languages Pre Seed Teaser Deck 2024.pdf
will854175
Chennai Call Gril 80022//12248 Only For Sex And High Profile Best Gril Sex Av...
Chennai Call Gril 80022//12248 Only For Sex And High Profile Best Gril Sex Av...
pujan9679
Lundin Gold - Q1 2024 Conference Call Presentation (Revised)
Lundin Gold - Q1 2024 Conference Call Presentation (Revised)
Adnet Communications
Dernier
(20)
Dr. Admir Softic_ presentation_Green Club_ENG.pdf
Dr. Admir Softic_ presentation_Green Club_ENG.pdf
The Abortion pills for sale in Qatar@Doha [+27737758557] []Deira Dubai Kuwait
The Abortion pills for sale in Qatar@Doha [+27737758557] []Deira Dubai Kuwait
Pre Engineered Building Manufacturers Hyderabad.pptx
Pre Engineered Building Manufacturers Hyderabad.pptx
Falcon Invoice Discounting: Empowering Your Business Growth
Falcon Invoice Discounting: Empowering Your Business Growth
Lucknow Housewife Escorts by Sexy Bhabhi Service 8250092165
Lucknow Housewife Escorts by Sexy Bhabhi Service 8250092165
Falcon Invoice Discounting: The best investment platform in india for investors
Falcon Invoice Discounting: The best investment platform in india for investors
Al Mizhar Dubai Escorts +971561403006 Escorts Service In Al Mizhar
Al Mizhar Dubai Escorts +971561403006 Escorts Service In Al Mizhar
Marel Q1 2024 Investor Presentation from May 8, 2024
Marel Q1 2024 Investor Presentation from May 8, 2024
HomeRoots Pitch Deck | Investor Insights | April 2024
HomeRoots Pitch Deck | Investor Insights | April 2024
SEO Case Study: How I Increased SEO Traffic & Ranking by 50-60% in 6 Months
SEO Case Study: How I Increased SEO Traffic & Ranking by 50-60% in 6 Months
Berhampur 70918*19311 CALL GIRLS IN ESCORT SERVICE WE ARE PROVIDING
Berhampur 70918*19311 CALL GIRLS IN ESCORT SERVICE WE ARE PROVIDING
How to Get Started in Social Media for Art League City
How to Get Started in Social Media for Art League City
Quick Doctor In Kuwait +2773`7758`557 Kuwait Doha Qatar Dubai Abu Dhabi Sharj...
Quick Doctor In Kuwait +2773`7758`557 Kuwait Doha Qatar Dubai Abu Dhabi Sharj...
Nashik Call Girl Just Call 7091819311 Top Class Call Girl Service Available
Nashik Call Girl Just Call 7091819311 Top Class Call Girl Service Available
GUWAHATI 💋 Call Girl 9827461493 Call Girls in Escort service book now
GUWAHATI 💋 Call Girl 9827461493 Call Girls in Escort service book now
Uneak White's Personal Brand Exploration Presentation
Uneak White's Personal Brand Exploration Presentation
PARK STREET 💋 Call Girl 9827461493 Call Girls in Escort service book now
PARK STREET 💋 Call Girl 9827461493 Call Girls in Escort service book now
Arti Languages Pre Seed Teaser Deck 2024.pdf
Arti Languages Pre Seed Teaser Deck 2024.pdf
Chennai Call Gril 80022//12248 Only For Sex And High Profile Best Gril Sex Av...
Chennai Call Gril 80022//12248 Only For Sex And High Profile Best Gril Sex Av...
Lundin Gold - Q1 2024 Conference Call Presentation (Revised)
Lundin Gold - Q1 2024 Conference Call Presentation (Revised)
Lecture15.ppt
1.
© 2003 The
McGraw-Hill Companies, Inc. All rights reserved. International Corporate Finance Chapter Twenty-Two
2.
McGraw-Hill/Irwin © 2003
The McGraw-Hill Companies, Inc. All rights reserved. 22.1 Domestic Financial Management and International Financial Management • Considerations in International Financial Management – Have to consider the effect of exchange rates when operating in more than one currency – Have to consider the political risk associated with actions of foreign governments – More financing opportunities when you consider the international capital markets and this may reduce the firm’s cost of capital
3.
McGraw-Hill/Irwin © 2003
The McGraw-Hill Companies, Inc. All rights reserved. 22.2 Global Capital Markets • The number of exchanges in foreign countries continues to increase, as does the liquidity on those exchanges • Exchanges that allow for the flow of capital are extremely important to developing countries • The United States has one of the most developed capital markets in the world, but foreign markets are becoming more competitive and are often willing to try more innovative ways to do business
4.
McGraw-Hill/Irwin © 2003
The McGraw-Hill Companies, Inc. All rights reserved. 22.3 Exchange Rates • The price of one country’s currency in terms of another • Most currency is quoted in terms of dollars • Consider the following quote: – France (Franc) .1460 6.8479 – The first number (.1460) is how many U.S. dollars it takes to buy 1 French Franc – The second number (6.8479) is how many French Francs it takes to buy $1 – The two numbers are reciprocals of each other (1/6.8479 = .1460)
5.
McGraw-Hill/Irwin © 2003
The McGraw-Hill Companies, Inc. All rights reserved. 22.4 Example: Exchange Rates • Suppose you have $10,000 . Based on the rates in Figure 18.1, how many Italian Lira can you buy? – Exchange rate = 2021.37 Lira per U.S. dollar – Buy 10,000(2021.37) = 20,213,700 Lira • Suppose you are visiting London and you want to buy a souvenir that costs 1000 British pounds. How much does it cost in U.S. dollars? – Exchange rate = .6669 pounds per dollar – Cost = 1000 / .6669 = $1499.48
6.
McGraw-Hill/Irwin © 2003
The McGraw-Hill Companies, Inc. All rights reserved. 22.5 Types of Transactions • Spot trade – exchange currency immediately – Spot rate – the exchange rate for an immediate trade • Forward trade – agree today to exchange currency at some future date and some specified price (also called a forward contract) – Forward rate – the exchange rate specified in the forward contract – If the forward rate is higher than the spot rate, the foreign currency is selling at a premium (when quoted as $ equivalents) – If the forward rate is lower than the spot rate, the foreign currency is selling at a discount
7.
McGraw-Hill/Irwin © 2003
The McGraw-Hill Companies, Inc. All rights reserved. 22.6 Absolute Purchasing Power Parity • Price of an item is the same regardless of the currency used to purchase it • Requirements for absolute PPP to hold – Transaction costs are zero – No barriers to trade (no taxes, tariffs, etc.) – No difference in the commodity between locations • Absolute PPP rarely holds in practice for many goods
8.
McGraw-Hill/Irwin © 2003
The McGraw-Hill Companies, Inc. All rights reserved. 22.7 Relative Purchasing Power Parity • Provides information about what causes changes in exchange rates • The basic result is that exchange rates depend on relative inflation between countries • E(St ) = S0[1 + (hFC – hUS)]t • Because absolute PPP doesn’t hold for many goods, we will focus on relative PPP from here on out
9.
McGraw-Hill/Irwin © 2003
The McGraw-Hill Companies, Inc. All rights reserved. 22.8 Example: PPP • Suppose the Canadian spot exchange rate is 1.4680 Canadian dollars per U.S. dollar. U.S. inflation is expected to be 3% per year and Canadian inflation is expected to be 2%. – Do you expect the U.S. dollar to appreciate or depreciate relative to the Canadian dollar? • Since inflation is higher in the US, we would expect the US dollar to depreciate relative to the Canadian dollar. – What is the expected exchange in one year? • E(S1) = 1.4680[1 + (.02 - .03)]1 = 1.4533
10.
McGraw-Hill/Irwin © 2003
The McGraw-Hill Companies, Inc. All rights reserved. 22.9 Interest Rate Parity • Based on the previous example, there must be a forward rate that would prevent the arbitrage opportunity. • Interest rate parity defines what that forward rate should be ) ( 1 : Approx. ) 1 ( ) 1 ( : Exact 0 1 0 1 US FC US FC R R S F R R S F
11.
McGraw-Hill/Irwin © 2003
The McGraw-Hill Companies, Inc. All rights reserved. 22.10 Unbiased Forward Rates • The current forward rate is an unbiased estimate of the future spot exchange rate • This means that on average the forward rate will equal the future spot rate – If the forward rate is consistently too high • Those who want to exchange yen for dollars would only be willing to transact in the future spot market • The forward price would have to come down for trades to occur – If the forward rate is consistently too low • Those who want to exchange dollars for yen would only be willing to transact in the future spot market • The forward price would have to come up for trades to occur
12.
McGraw-Hill/Irwin © 2003
The McGraw-Hill Companies, Inc. All rights reserved. 22.11 Overseas Production: Alternative Approaches • Home Currency Approach – Estimate cash flows in foreign currency – Estimate future exchange rates using UIP – Convert future cash flows to dollars – Discount using domestic required return • Foreign Currency Approach – Estimate cash flows in foreign currency – Use the IFE to convert domestic required return to foreign required return – Discount using foreign required return – Convert NPV to dollars using current spot rate
13.
McGraw-Hill/Irwin © 2003
The McGraw-Hill Companies, Inc. All rights reserved. 22.12 Repatriated Cash Flows • Often some of the cash generated from a foreign project must remain in the foreign country due to restrictions on repatriation • Repatriation can occur in several ways – Dividends to parent company – Management fees for central services – Royalties on the use of trade names and patents
14.
McGraw-Hill/Irwin © 2003
The McGraw-Hill Companies, Inc. All rights reserved. 22.13 Short-Run Exposure • Risk from day-to-day fluctuations in exchange rates and the fact that companies have contracts to buy and sell goods in the short-run at fixed prices • Managing risk – Enter into a forward agreement to guarantee the exchange rate – Use foreign currency options to lock in exchange rates if they move against you but benefit from rates if they move in your favor
15.
McGraw-Hill/Irwin © 2003
The McGraw-Hill Companies, Inc. All rights reserved. 22.14 Long-Run Exposure • Long-run fluctuations come from unanticipated changes in relative economic conditions • Could be due to changes in labor markets or governments • More difficult to hedge • Try to match long-run inflows and outflows in the currency • Borrowing in the foreign country may mitigate some of the problems
16.
McGraw-Hill/Irwin © 2003
The McGraw-Hill Companies, Inc. All rights reserved. 22.15 Translation Exposure • Income from foreign operations has to be translated back to U.S. dollars for accounting purposes, even if foreign currency is not actually converted back to dollars • If gains and losses from this translation flowed through directly to the income statement, there would be significant volatility in EPS • Current accounting regulations require that all cash flows be converted at the prevailing exchange rates with currency gains and losses accumulated in a special account within shareholders equity
17.
McGraw-Hill/Irwin © 2003
The McGraw-Hill Companies, Inc. All rights reserved. 22.16 Managing Exchange Rate Risk • Large multinational firms may need to manage the exchange rate risk associated with several different currencies • The firm needs to consider its net exposure to currency risk instead of just looking at each currency separately • Hedging individual currencies could be expensive and may actually increase exposure
18.
McGraw-Hill/Irwin © 2003
The McGraw-Hill Companies, Inc. All rights reserved. 22.17 Political Risk • Changes in value due to political actions in the foreign country • Investment in countries that have unstable governments should require higher returns • The extent of political risk depends on the nature of the business – The more dependent the business is on other operations within the firm, the less valuable it is to others – Natural resource development can be very valuable to others, especially if much of the ground work in developing the resource has already been done • Local financing can often reduce political risk
Télécharger maintenant