韩山师范学院财务管理课件第二十一章 International Financial Management.ppt

Chapter 21 International FinancialManagement Chapter 21 - Outline LT 21-1 Multinational Corporations (MNCs) Exchange Rates Spot Rates and Forward Rates Managing Foreign Exchange Risk Financing International Business Operations Multinational Corporations LT 21-2 Multinational Corporations (MNCs) –firms doing business in more than one country Often 30% or more of a firm’s business activities are carried on outside its national borders 4 basic forms of multinational corporations: – Exporter – Licensing Agreement – Joint Venture – Fully Owned Foreign Subsidiary Exchange Rates LT 21-3 The exchange rate is the price or value of one currency in terms of another Published daily in The Wall Street Journal Factors Influencing Exchange Rates: – Supply of and Demand for each Currency – Inflation – Interest Rates – Balance of Payments – Government Policies – Other Factors Spot Rates and Forward Rates LT 21-4 Spot Rate: – the exchange rate between currencies for immediate delivery –“on-the-spot” rate Forward Rate: – the exchange rate that is established for future delivery – deals with a specified future time Managing ForeignExchange Risk LT 21-5 Foreign Exchange Risk refers to the risk involved in fluctuating or changing exchange rates It affects importers, exporters, investors, and multinational firms Strategies for Dealing with Foreign Exchange Risk: – Forward Exchange Market Hedge – Money Market Hedge – Currency Futures Market Hedge – Foreign Asset Management Programs Financing International Business Operations LT 21-6 There are several ways of funding foreign transactions: – Eximbank (Export-Import Bank) – Loans from the Parent Company or a Sister Affiliate – Eurodollar Loans – Eurobond Market – International Equity Markets – The International Finance Corporation (IFC) McGraw-Hill/Irwin ? 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. PPT 21-1 FIGURE 21-1 1 euro (E) to the U.S. $and the British pound PPT