Multinational Financial Management
○ Managing the MNC
○ Why Firms Pursue International Business
○ How Firms Engage in International
○ Business Valuation Model for an MNC
● International Flow of Funds
○ Balance of Payments
○ International Trade Flows
○ International Trade Issues
○ Factors Affecting International Trade Flows
● International Flow of Funds
○ Correcting a Balance-of-Trade Deficit
○ International Capital Flows
○ Agencies That Facilitate International Flows
○ How International Trade affects an MNC’s Value
● International Financial Market
○ Foreign Exchange Market
○ International Money Market
○ International Credit Market
○ International Bond Market International Stock Markets
○ How Financial Markets Facilitate MNC Functions.
● Exchange Rate Determination
○ Measuring Exchange Rate Movements
○ Factors That Influence Exchange Rates
○ Speculating on Anticipated Exchange Rates
● Currency Derivatives
○ Forward Market
- 105 -
○ Currency Futures Market Speculation with Currency Futures
○ Currency Options Market
○ Speculation with Currency Options Market
● Government Influence on Exchange rate & International Arbitrage and Interest Rate
Parity
○ Exchange Rate Systems
○ Government Intervention
○ Intervention as a Policy Tool
● Relationships among Inflation, Interest Rates and Exchange Rates
○ Purchasing Power Parity (PPP)
○ International Fisher Effect (IFE)
○ Comparison of the IRP, PPP, and IFE Theories
● Direct Foreign Investment
○ Motives for Direct Foreign Investment
○ Benefits of International Diversification.
● Multinational Capital Budgeting
○ Subsidiary versus Parent Perspective
○ Factors to Consider in Multinational Capital Budgeting
○ Input for Multinational Capital Budgeting
● Country Risk Analysis
○ Political Risk Factors
○ Financial Risk Factors
○ Types of Country Risk Assessment Techniques to Assess Country Risk
○ Incorporating Country Risk in Capital Budgeting
● Multinational Cost of Capital
○ Cost of Capital for MNCs
○ Costs of Capital across Countries
○ Use of Cost of Capital for Assessing Foreign Projects
○ The MNC’s Capital Structure Decision.
● Financing International Trade
○ Payment Methods for International Trade
○ Trade Finance Methods
○ Agencies That Motivate International Trade