公司理财21章PPT.ppt

Chapter21InternationalCorporateFinance McGraw Hill Irwin 交流学习PPT KeyConceptsandSkills UnderstandhowexchangeratesarequotedandwhattheymeanKnowthedifferencebetweenspotandforwardratesUnderstandpurchasingpowerparityandinterestrateparityandtheimplicationsforchangesinexchangeratesUnderstandthebasicsofinternationalcapitalbudgetingUnderstandtheimpactofpoliticalriskoninternationalbusinessinvesting 21 2 交流学习PPT ChapterOutline TerminologyForeignExchangeMarketsandExchangeRatesPurchasingPowerParityInterestRateParity UnbiasedForwardRates andtheInternationalFisherEffectInternationalCapitalBudgetingExchangeRateRiskPoliticalRisk 21 3 交流学习PPT DomesticFinancialManagementandInternationalFinancialManagement ConsiderationsinInternationalFinancialManagementNeedtoconsidertheeffectofexchangerateswhenoperatinginmorethanonecurrencyMustconsiderthepoliticalriskassociatedwithactionsofforeigngovernmentsMorefinancingopportunitieswhenyouconsidertheinternationalcapitalmarkets whichmayreducethefirm scostofcapital 21 4 交流学习PPT InternationalFinanceTerminology AmericanDepositaryReceipt ADR Cross rateEurobondEurocurrency Eurodollars ForeignbondsGiltsLondonInterbankOfferRate LIBOR Swaps 21 5 交流学习PPT GlobalCapitalMarkets Thenumberofexchangesinforeigncountriescontinuestoincrease asdoestheliquidityonthoseexchangesExchangesthatallowfortheflowofcapitalareextremelyimportanttodevelopingcountriesTheUnitedStateshasoneofthemostdevelopedcapitalmarketsintheworld butforeignmarketsarebecomingmorecompetitiveandareoftenwillingtotrymoreinnovativewaystodobusiness 21 6 交流学习PPT ExchangeRates Thepriceofonecountry scurrencyintermsofanotherMostcurrencyisquotedintermsofdollarsConsiderthefollowingquote Euro1 2695 7877Thefirstnumber 1 2695 ishowmanyU S dollarsittakestobuy1EuroThesecondnumber 7877 ishowmanyEurosittakestobuy 1Thetwonumbersarereciprocalsofeachother 1 1 2695 7877 21 7 交流学习PPT Example ExchangeRates Supposeyouhave 10 000 BasedontheratesinFigure21 1 howmanyJapaneseYencanyoubuy Exchangerate 108 21YenperdollarBuy10 000 108 21 1 082 100YenSupposeyouarevisitingMumbaiandyouwanttobuyasouvenirthatcosts1 000IndianRupees HowmuchdoesitcostinU S dollars Exchangerate 42 882rupeesperdollarCost 1 000 42 882 23 32 21 8 交流学习PPT WorktheWebExample ThinkingaboutgoingtoMexicoforspringbreakorJapanforyoursummervacation Howmanypesosoryencanyougetinexchangefor 1 000 Clickonthewebsurfertofindout 21 9 交流学习PPT Example TriangleArbitrage Weobservethefollowingquotes1Europer 12SwissFrancper 1 4Europer1SwissFrancWhatisthecrossrate 1Euro 1 2SF 1 5Euro SFWehave 100toinvest buylow sellhighBuy 100 1Euro 1 100Euro useEurotobuySFBuy100Euro 4Euro 1SF 250SF useSFtobuydollarsBuy250SF 2SF 1 125Make 25risk free 21 10 交流学习PPT TypesofTransactions Spottrade exchangecurrencyimmediatelySpotrate theexchangerateforanimmediatetradeForwardtrade agreetodaytoexchangecurrencyatsomefuturedateandsomespecifiedprice alsocalledaforwardcontract Forwardrate theexchangeratespecifiedintheforwardcontractIftheforwardrateishigherthanthespotrate theforeigncurrencyissellingatapremium whenquotedas equivalents Iftheforwardrateislowerthanthespotrate theforeigncurrencyissellingatadiscount 21 11 交流学习PPT AbsolutePurchasingPowerParity Priceofanitemshouldbethesameinrealterms regardlessofthecurrencyusedtopurchaseitRequirementsforabsolutePPPtoholdTransactioncostsarezeroNobarrierstotrade notaxes tariffs etc NodifferenceinthecommoditybetweenlocationsFormostgoods absolutePPPrarelyholdsinpractice 21 12 交流学习PPT RelativePurchasingPowerParity ProvidesinformationaboutwhatcauseschangesinexchangeratesThebasicresultisthatexchangeratesdependonrelativeinflationbetweencountriesE St S0 1 hFC hUS tBecauseabsolutePPPdoesn tholdformanygoods wewillfocusonrelativePPPfromhereonout 21 13 交流学习PPT Example PPP SupposetheCanadianspotexchangerateis1 18CanadiandollarsperU S dollar U S inflationisexpectedtobe3 peryear andCanadianinflationisexpectedtobe2 DoyouexpecttheU S dollartoappreciateordepreciaterelativetotheCanadiandollar SinceexpectedinflationishigherintheU S wewouldexpecttheU S dollartodepreciaterelativetotheCanadiandollar Whatistheexpectedexchangerateinoneyear E S1 1 18 1 02 03 1 1 1682 21 14 交流学习PPT CoveredInterestArbitrage Examinestherelationshipbetweenspotrates forwardrates andnominalratesbetweencountriesAgain theformulaswillassumethattheexchangeratesarequotedintermsofforeigncurrencyperU S dollarTheU S risk freerateisassumedtobetheT billrate 21 15 交流学习PPT Example CoveredInterestArbitrage ConsiderthefollowinginformationS0 8Euro RUS 4 F1 7Euro RE 2 Whatisthearbitrageopportunity Borrow 100at4 Buy 100 8Euro 80Euroandinvestat2 for1yearIn1year receive80 1 02 81 6Euroandconvertbacktodollars81 6Euro 7Euro 116 57andrepayloanProfit 116 57 100 1 04 12 57riskfree 21 16 交流学习PPT InterestRateParity Basedonthepreviousexample theremustbeaforwardratethatwouldpreventthearbitrageopportunity Interestrateparitydefineswhatthatforwardrateshouldbe 21 17 交流学习PPT UnbiasedForwardRates ThecurrentforwardrateisanunbiasedestimateofthefuturespotexchangerateThismeansthat onaverage theforwardratewillequalthefuturespotrateIftheforwardrateisconsistentlytoohighThosewhowanttoexchangeyenfordollarswouldonlybewillingtotransactinthefuturespotmarketTheforwardpricewouldhavetocomedownfortradestooccurIftheforwardrateisconsistentlytoolowThosewhowanttoexchangedollarsforyenwouldonlybewillingtotransactinthefuturespotmarketTheforwardpricewouldhavetocomeupfortradestooccur 21 18 交流学习PPT UncoveredInterestParity Whatweknowsofar PPP E S1 S0 1 hFC hUS IRP F1 S0 1 RFC RUS UFR F1 E S1 Combiningtheformulasweget E S1 S0 1 RFC RUS foroneperiodE St S0 1 RFC RUS t 21 19 交流学习PPT InternationalFisherEffect CombiningPPPandUIPwecangettheInternationalFisherEffectRUS hUS RFC hFCTheInternationalFisherEffecttellsusthattherealrateofreturnmustbeconstantacrosscountriesIfitisnot investorswillmovetheirmoneytothecountrywiththehigherrealrateofreturn 21 20 交流学习PPT OverseasProduction AlternativeApproaches HomeCurrencyApproachEstimatecashflowsinforeigncurrencyEstimatefutureexchangeratesusingUIPConvertfuturecashflowstodollarsDiscountusingdomesticrequiredreturnForeignCurrencyApproachEstimatecashflowsinforeigncurrencyUsetheIFEtoconvertdomesticrequiredreturntoforeignrequiredreturnDiscountusingforeignrequiredreturnConvertNPVtodollarsusingcurrentspotrate 21 21 交流学习PPT HomeCurrencyApproach YourcompanyislookingatanewprojectinMexico Theprojectwillcost9millionpesos Thecashflowsareexpectedtobe2 25millionpesosperyearfor5years Thecurrentspotexchangerateis10 91pesosperdollar Therisk freerateintheUSis4 andtherisk freerateinMexico8 Thedollarrequiredreturnis15 Shouldthecompanymaketheinvestment 21 22 交流学习PPT ForeignCurrencyApproach UsethesameinformationasthepreviousexampletoestimatetheNPVusingtheForeignCurrencyApproachRelativeinflationdifferencefromtheInternationalFisherEffectis8 4 4 RequiredReturn 1 15 1 04 1 19 6 PVoffuturecashflows 6 788 537pesosNPV 6 788 537 9 000 000 2 211 463pesosNPV 2 211 463 10 91 202 701 21 23 交流学习PPT RepatriatedCashFlows Often someofthecashgeneratedfromaforeignprojectmustremainintheforeigncountryduetorestrictionsonrepatriationRepatriationcanoccurinseveralwaysDividendstoparentcompanyManagementfeesforcentralservicesRoyaltiesontheuseoftradenamesandpatents 21 24 交流学习PPT Short RunExposure Riskfromday to dayfluctuationsinexchangeratesandthefactthatcompanieshavecontractstobuyandsellgoodsintheshort runatfixedpricesManagingriskEnterintoaforwardagreementtoguaranteetheexchangerateUseforeigncurrencyoptionstolockinexchangeratesiftheymoveagainstyou butbenefitfromratesiftheymoveinyourfavor 21 25 交流学习PPT Long RunExposure Long runfluctuationscomefromunanticipatedchangesinrelativeeconomicconditionsCouldbeduetochangesinlabormarketsorgovernmentsMoredifficulttohedgeTrytomatchlong runinflowsandoutflowsinthecurrencyBorrowingintheforeigncountrymaymitigatesomeoftheproblems 21 26 交流学习PPT TranslationExposure IncomefromforeignoperationsmustbetranslatedbacktoU S dollarsforaccountingpurposes evenifforeigncurrencyisnotactuallyconvertedbacktodollarsIfgainsandlossesfromthistranslationflowedthroughdirectlytotheincomestatement therewouldbesignificantvolatilityinEPSExistingaccountingregulationsrequirethatallcashflowsbeconvertedattheprevailingexchangerateswithcurrencygainsandlossesaccumulatedinaspecialaccountwithinshareholdersequity 21 27 交流学习PPT ManagingExchangeRateRisk LargemultinationalfirmsmayneedtomanagetheexchangerateriskassociatedwithseveraldifferentcurrenciesThefirmneedstoconsideritsnetexposuretocurrencyriskinsteadofjustlookingateachcurrencyseparatelyHedgingindividualcurrenciescouldbeexpensiveandmayactuallyincreaseexposure 21 28 交流学习PPT PoliticalRisk ChangesinvalueduetopoliticalactionsintheforeigncountryInvestmentincountriesthathaveunstablegovernmentsshouldrequirehigherreturnsTheextentofpoliticalriskdependsonthenatureofthebusinessThemoredependentthebusinessisonotheroperationswithinthefirm thelessvaluableitistoothersNaturalresourcedevelopmentcanbeveryvaluabletoothers especiallyifmuchofthe