公司理财（第6版）（上下册）课件 第31章　国际公司理财

CorporateFinanceSixthEditionChapter31InternationalCorporateFinanceCopyright©2024,2021,2018PearsonEducation,Inc.AllRightsReservedChapterOutline31.1

InternationallyIntegratedCapitalMarkets31.2

ValuationofForeignCurrencyCashFlows31.3

ValuationandInternationalTaxation31.4

InternationallySegmentedCapitalMarkets31.5CapitalBudgetingwithExchangeRiskLearningObjectives(1of2)Discusstheconditionnecessaryforinternationallyintegratedcapitalmarkets.Describetwomethodsthatcanbeusedtovalueforeigncurrencycashflows;usethosemethodstovaluethoseflows.CalculateforeignanddomesticWACCs,usingequation31.7,giventhreeoutofthefourinputs.LearningObjectives(2of2)Describethemajorprovisionsofthe2017TaxCutsandJobsAct.Discusstheimplicationsofthepossibilitythatcapitalmarketsareinternationallysegmented.Valueaprojectwhenithasinputsandoutputsindifferentcurrencies.31.1InternationallyIntegratedCapitalMarkets(1of7)Considerariskyforeignassetthatisexpectedtopaythecashflow,inoneperiodInanormalmarket,thepriceofthisassetinaforeignmarketis31.1InternationallyIntegratedCapitalMarkets(2of7)AU.S.investorwhowantstopurchasethisassetindollarswillhavetopayWhereSiscurrentspotexchangerateindollarsperforeigncurrency31.1InternationallyIntegratedCapitalMarkets(3of7)AnyU.S.investorwhoactuallypurchasedthissecuritywouldhavetoconvertthefuturecashflowintodollars,sothepayofftosuchaninvestoristhedollarcashflowitproduces31.1InternationallyIntegratedCapitalMarkets(4of7)Tovaluethiscashflow,assumethattheU.S.investorcontractstodaytoconverttheexpectedcashflowinoneperiodattheforwardrate,F,quotedasdollarsperforeigncurrencyTheU.S.investor’sexpecteddollarcashflowis31.1InternationallyIntegratedCapitalMarkets(5of7)IfisthecostofcapitalforU.S.investor,thepresentvalueofthisexpectedcashflowis31.1InternationallyIntegratedCapitalMarkets(6of7)BytheLawofOnePrice,thisvaluemustbeequaltowhattheU.S.investorpaidforthesecurity:WhichsimplifiestoThisissimplycoveredinterestparity31.1InternationallyIntegratedCapitalMarkets(7of7)InternationallyIntegratedCapitalMarketsWhenanyinvestorcanexchangecurrenciesinanyamountatthespotorforwardratesandisfreetopurchaseorsellanysecurityinanyamountinanycountryatitscurrentmarketpricesWithinternationallyintegratedcapitalmarkets,thevalueofaninvestmentdoesnotdependonthecurrencyusedTextbookExample31.1(1of2)PresentValuesandInternationallyIntegratedCapitalMarketsProblemYouareanAmericanwhotryingtocalculatethepresentvalueofamillioncashflowthatwilloccuroneyearinthefuture.Youknowthatthespotexchangerateisandtheone-yearforwardrateisYoualsoknowthattheappropriatedollarcostofcapitalforthiscashflowisandthattheappropriateyencostofcapitalforthiscashflowisWhatisthepresentvalueofthemillioncashflowfromthestandpointofaJapaneseinvestor,andwhatisthedollarequivalentofthisamount?WhatisthepresentvalueofthemillioncashflowfromstandpointofaU.S.investorwhofirstconvertsthemillionintodollars,andthenappliesthedollardiscountrate?TextbookExample31.1(2of2)SolutionThepresentvalueoftheyencashflowisandthedollarequivalentis(NotethatweadjustedtheformulainEquation31.2becausetheexchangerateisexpressedasyenperdollarsperyen.)ThepresentvaluefromthestandpointofaU.S.investorwhofirstconvertsthemillionintodollarsusingtheforwardrateandthenappliesthedollarcostofcapitalis(Again,wehaveadjustedtheformulainEquation31.3becausetheexchangerateisexpressedasyenperdollar).BecausetheU.S.andJapanesecapitalmarketsareinternationallyintegrated,bothmethodsproducethesameresult.AlternativeExample31.1(1of5)ProblemYouareanAmericanwhoistryingtocalculatethepresentvalueofamillioncashflowthatwilloccuroneyearinthefuture.Youknowthatthespotexchangerateisandtheone-yearforwardrateisAlternativeExample31.1(2of5)ProblemYoualsoknowthattheappropriatedollarcostofcapitalforthiscashflowis6.25%andthattheappropriatepoundcostofcapitalforthiscashflowis5.25%.WhatisthepresentvalueofthemillioncashflowfromthestandpointofaBritishinvestor,andwhatisthedollarequivalentofthisamount?AlternativeExample31.1(3of5)ProblemWhatisthepresentvalueofthe₤25millioncashflowfromthestandpointofaU.S.investorwhofirstconvertsthe₤25millionintodollarsandthenappliesthedollardiscountrate?AlternativeExample31.1(4of5)SolutionFortheBritishinvestor,ThepresentvalueofthepoundcashflowisThedollarequivalentisAlternativeExample31.1(5of5)SolutionFortheU.S.investor,Thepresentvalueoftheconvertingthe₤25milliontodollarsusingtheforwardrateandthenapplyingthedollarcostofcapitalisNote:The$693differenceisaroundingerror.31.2ValuationofForeignCurrencyCashFlowsInaninternationallyintegratedcapitalmarket,twoequivalentmethodsareavailableforcalculatingtheNPVofaforeignprojectCalculatetheNPVintheforeigncountryandconvertittothelocalcurrencyatthespotrateConvertthecashflowsoftheforeignprojectintothelocalcurrencyandthencalculatetheNPVofthesecashflowsWACCValuationMethodinDomesticCurrencyConvertingthecashflowsoftheforeignprojectintothelocalcurrencyandthencalculatingtheNPVofthesecashflowsistheequivalentofconvertingtheexpecteddollarvalueoftheforeigncurrencycashflowsandthenproceedingtovaluetheprojectasifitwereadomesticprojectApplication:Ityesi,Inc.(1of9)Ityesi,Inc.wantstoapplytheWACCtechniquetovalueaprojectintheUnitedKingdomTheprojectwillbecompletelyself-containedintheUnitedKingdom,suchthatallrevenuesaregeneratedandallcostsareincurredthereApplication:Ityesi,Inc.(2of9)Thetechnologyusedinthenewproductswillbeobsoleteafterfouryears.Annualsalesareexpectedtobeperyear.Manufacturingcostsandoperatingexpensesareexpectedtototalandperyear,respectivelyApplication:Ityesi,Inc.(3of9)DevelopingtheproductwillrequireanupfrontinvestmentofincapitalequipmentthatwillbeobsoleteinfouryearsandaninitialmarketingexpenseofItyesipaysacorporatetaxrateof25%nomatterinwhichcountryitmanufacturesitsproducts.Table31.1ExpectedForeignFreeCashFlowsfromItyesi’sU.K.ProjectApplication:Ityesi,Inc.(4of9)ForwardExchangeRatesThecurrentspotexchangerate,S,isAssumetherisk-freerateondollars,is4%andtherisk-freeinterestrateonpounds,is7%Application:Ityesi,Inc.(5of9)ForwardExchangeRatesUsingthecoveredinterestparitycondition:Application:Ityesi,Inc.(6of9)FreeCashFlowConversionUsingtheseforwardexchangerates,theexpectedfreecashflowsindollarscanbecalculatedbymultiplyingtheexpectedcashflowsinpoundsbytheforwardexchangerateTable31.2ExpectedDollarFreeCashFlowsfromItyesi’sU.K.ProjectApplication:Ityesi,Inc.(7of9)TheValueofItyesi’sForeignProjectwithWACCWiththecashflowsoftheU.K.projectnowexpressedindollars,theforeignprojectcanbevaluedasifitwereadomesticU.S.projectTable31.3Ityesi’sCurrentMarketValueBalanceSheet($millions)andCostofCapitalWithouttheU.K.ProjectApplication:Ityesi,Inc.(8of9)TheValueofItyesi’sForeignProjectwithWACCItyesi’sWACCiscalculatedasfollows:Note:Ityesi’snetdebtisthe$320millionindebtminusthe$20millionincashforanetdebtof$300millionApplication:Ityesi,Inc.(9of9)TheValueofItyesi’sForeignProjectwithWACCThepresentvalueofthefuturefreecashflowsisGiventheupfrontcostoflaunchingtheproductlineindollarsisonly$22.75million,thenetpresentvalueis$23.27millionUsingtheLawofOnePriceasaRobustnessCheck(1of3)ItyesicouldhavecomputedtheforeignNPVbydiscountingtheforeigncashflowsattheforeigncostofcapitalandconvertingthisresulttoadomesticNPVusingthespotrateDeterminingtheNPVrequiresknowingtheforeigncostofcapitalUsingtheLawofOnePriceasaRobustnessCheck(2of3)TheforeigncostofcapitalmustsatisfytheLawofOnePrice:andUsingtheLawofOnePriceasaRobustnessCheck(3of3)TheforeigncostofcapitalmustsatisfytheLawofOnePrice:TheforeigncostofcapitalintermsofthedomesticcostofcapitalandinterestratesisTheForeign-DenominatedCostofCapitalTextbookExample31.2(1of2)InternationalizingtheCostofCapitalProblemUsethelawofonepricetoinferthepoundWACCfromItyesi’sdollarWACC.VerifythattheNPVofItyesi’sprojectisthesamewhenitspoundfreecashflowsarediscountedatthisWACCandconvertedatthespotrate.TextbookExample31.2(2of2)SolutionUsingEquation.31.7tocomputethepoundWACCgivesThepoundWACCis10.34%.WecannowuseItyesi’spoundWACCtocalculatethepresentvalueofthepoundfreecashflowsinTable31.3:TheNPVinpoundsoftheinvestmentopportunityismillion.ConvertingthisamounttodollarsatthespotrategiveswhichisexactlytheNPVwecalculatedbefore.AlternativeExample31.2(1of2)ProblemSkyMotors,basedinAustin,TX,isconsideringopeningamanufacturingplantinMexico.Sky’sweightedaveragecostofcapitalintheUnitedStatesis12%.Thecurrentrisk-freerateis2%intheUnitedStatesand8%inMexico.Whatisthefirm’spesoWACC?AlternativeExample31.2(2of2)SolutionUsingEquation31.7,31.3ValuationandInternationalTaxation(1of3)RepatriatedReferstotheprofitsfromaforeignprojectthatafirmbringsbacktoitshomecountry31.3ValuationandInternationalTaxation(2of3)Priortothepassageofthe2017TaxCutsandJobsAct(TCJA),theUnitedStatestaxedtheworldwideearningsofU.S.companiesatthesamerateasprofitsearnedintheUnitedStates,butwithafulltaxcreditforanyforeigntaxespaidThus,ifthehostcountryhadataxrateof10%,theU.S.firmwouldowethedifferencebetweentheU.S.taxrateof35%andthe10%foreigntaxrateThisadditional25%taxwasdeferreduntiltheforeignprofitswererepatriatedtotheUnitedStates31.3ValuationandInternationalTaxation(3of3)ThereweretwonegativeconsequencesofthissystemItencouragedcompaniestokeeptheirforeignprofitsoverseasratherthanrepatriatethemBecauseU.S.taxrateswereamongthehighestintheworld,itencouragedcompaniestomovetheirmostvaluableassets,andeventheirlegalheadquarters,outsidetheUnitedStatesTheTCJA:ANewApproachtoInternationalTaxationInadditiontoloweringthecorporatetaxrateto21%,theTCJAintroducedseveralnewprovisionsthatsignificantlychangedthetaxtreatmentofforeignincomeMostimportantly,theTCJAintroducedaparticipationexemption,whichallowsU.S.firmstoexcludetheirforeignprofitsfromtheirtaxableincomeAsaresult,firmsnolongerfaceadditionalU.S.corporatetaxesontheirforeignprofitsHarmonizingtheTaxTreatmentofExports:GILTIandFDII

(1of4)GILTIGlobalIntangibleLowTaxIncomeEqualtothefirm’sforeignearningsinexcessofa“normal”returnonthefirm’stangibledepreciableforeignassets(equipment,buildings,factories)HarmonizingtheTaxTreatmentofExports:GILTIandFDII

(2of4)GILTIThelawdefinesanappropriatenormalreturntobe10%afterforeigntaxes,whichgivenaforeigntaxrateofisequivalenttoapre-taxreturnofHarmonizingtheTaxTreatmentofExports:GILTIandFDII

(3of4)FDIIForeign-DerivedIntangibleIncomeAcorporation’sU.S.pre-taxincomefromtheexportofgoodsorservicesinexcessofa10%returnonthefirm’sassociateddepreciabledomesticassetsHarmonizingtheTaxTreatmentofExports:GILTIandFDII

(4of4)FDIIFDIIreceivesaspeciallowertaxrateof13.125%(ratherthanthenormal21%rate)TheintentofthislowertaxrateistomakeitmoreattractiveforU.S.firmstoholdtheirintangibleassetsdomesticallyandexporttheirproductsandservicesTogether,thesetwoprovisionscombinetocreateasimilartaxrateonintangiblesusedtogenerateforeignprofitsregardlessofwherethoseintangiblesarelocatedAvoidingBaseErosion:BEAT

(1of3)BEATBaseErosionandAnti-AbuseTaxEssentiallya10%minimumtaxonlargecorporationsthatmakesignificantpaymentstotheirforeignsubsidiariesintheformofmarkupsforgoodsandservices,rents,royalties,orotherso-calledbaseerosionpaymentsItappliestocorporationswithover$500millioninrevenueandbaseerosionpaymentsinexcessof3%oftheirtotalexpensesAvoidingBaseErosion:BEAT

(2of3)BEATTheBEATliabilityiscalculatedas:ThefirmmustthenpaythemaximumofBEATandtheordinarycorporatetax(currently21%oftaxableincome)TheBEATisdesignedtopreventfirmsfromshieldingtoomuchoftheirincomefromU.S.taxesvialargetransferpaymentstoforeignsubsidiariesAvoidingBaseErosion:BEAT

(3of3)BEATTogether,theseprovisionsrepresentamajorreformoftheU.S.taxtreatmentofforeignincome.TheyaredesignedtomakeU.S.firmsmorecompetitiveinternationallybyloweringtheiroveralltaxratesubstantiallyreducetheincentivetoshiftprofitsoverseastolowertaxjurisdictionseliminatetheincentivetokeepprofitsoverseasonceearned31.4InternationallySegmentedCapitalMarketsSegmentedCapitalMarketsCapitalmarketsthatarenotinternationallyintegratedDifferentialAccesstoMarkets(1of2)FirmsmayfacedifferentialaccesstomarketsifthereisanykindofasymmetrywithrespecttoinformationaboutthemForexample,ItyesimaybewellknownintheUnitedStatesbutnotbeequallywellknownintheUnitedKingdom,thusincreasingtheirWACCintheUnitedKingdomItyesiwouldthenviewtheforeignprojectaslessvaluableifitraisescapitalintheUnitedKingdomratherthanintheUnitedStatesDifferentialAccesstoMarkets(2of2)DifferentialaccesstonationalcapitalmarketsiscommonenoughthatitprovidesthebestexplanationfortheexistenceofcurrencyswapsCurrencySwapsAcontractinwhichpartiesagreetoexchangecouponpaymentsandafinalfacevaluepaymentthatareindifferentcurrenciesCurrencyswapsallowfirmstomitigatetheirexchangerateriskexposurewhilestillmakinginvestmentsandraisingfundsinthemostattractivelocalesMacro-LevelDistortionsImportantmacroeconomicreasonsforsegmentedcapitalmarketsincludecapitalcontrolsandforeignexchangecontrolsthatcreatebarrierstointernationalcapitalflowsandthussegmentnationalmarketsPolitical,legal,social,andculturalcharacteristicsthatdifferacrosscountriesmayrequirecompensationintheformofacountryriskpremiumTextbookExample31.3(1of3)RiskyGovernmentBondsProblemOnJuly27,2009,thespotruble-dollarexchangeratewasR33.7382/$.Atthe,time,theyieldonshort-termRussiangovernmentbondswasabout11%,whilethecomparableone-yearyieldonU.S.Treasurysecuritieswas0.5%Usingthecoveredinterestparityrelationship,calculatetheimpliedone-yearforwardrate.Comparethisratetotheactualforwardrate,andexplainwhythetworatesdiffer.TextbookExample31.3(2of3)SolutionUsingthecoveredinterestparityformula,theimpliedforwardrateisTheimpliedforwardrateishigherthanthecurrentspotratebecauseRussiangovernmentbondshavehigheryieldsthanU.S.governmentbonds.ThedifferencebetweentheimpliedforwardrateandtheactualforwardratelikelyreflectsthedefaultriskinRussiangovernmentbonds(theRussiangovernmentdefaultedonitsdebtasrecentlyas1998).Aholderof100,000rublesseekingatruerisk-freeinvestmentcouldconverttherublestodollars,investinU.S.Treasuries,andconverttheproceedsbacktorublesataratelockedinwithaforwardcontract.Bydoingso,theinvestorwouldearnTextbookExample31.3(3of3)foraneffectiverublerisk-freerateof9.432%.Thehigherrateof11%onRussianbondsreflectsacreditspreadoftocompensatebondholdersfordefaultrisk.AlternativeExample31.3(1of2)ProblemInMarch2007,thespotCanadiandollar(CAN$)–U.Sdollar(US$)

exchangeratewasCAN$Atthetime,theyieldonone-yearCanadiangovernmentbondswasabout4%,whilethecomparableone-yearyieldonU.S.Treasurysecuritieswas5%.Usingthecoveredinterestparityrelationship,calculatetheimpliedone-yearforwardrate.AlternativeExample31.3(2of2)SolutionTheimpliedone-yearforwardrateisCAN$ImplicationsFirmsmaybeabletobenefitfromasegmentedinternationalfinancialmarketifonecountryorcurrencyhasahigherrateofreturnthananothercountryorcurrency,whenthetworatesarecomparedinthesamecurrencyTextbookExample31.4(1of5)ValuingaForeignAcquisitioninaSegmentedMarketProblemCamachoenterprisesisaU.S.companythatisconsideringexpandingbyacquiringXtapa,Inc.,afirminMexico.TheacquisitionisexpectedtoincreaseCamacho’sfreecashflowsby21millionpesosthefirstyear:thisamountisthenexpectedtogrowatarateof8%peryear.Thepriceoftheinvestmentis525millionpesos,whichis$52.5millionatthecurrentexchangerateof10pesos/$/basedonananalysisintheMexicanmarket,Camachohasdeterminedthattheappropriateafter–taxpesoWACCis12%.IfCamachohasalsodeterminedthatitsafter-taxdollarWACCforthisexpansionis7.5%,whatisthevalueoftheMexicanacquisition?AssumethattheMexicanandU.S.marketsforrisk-freesecuritiesareintegratedandthattheyieldcurveinbothcountriesisflat.U.S.risk-freeinterestratesare6%,andMexicanrisk-freeinterestratesare9%.TextbookExample31.4(2of5)SolutionLet’sbeginbycalculatingtheNPVoftheexpansioninpesosandconvertingtheresultintodollarsatthespotrate.Puttingthefreecashflowsonatimeline:ThenetpresentvalueofthesecashflowsatthepesoWACCissothepurchaseisazero-NPVtransaction.Presumably,CamachoiscompetingwithotherMexicancompaniesforthepurchase,andtheyhavebidupthepricetothepointthatTextbookExample31.4(3of5)WecanalsocomputetheNPVindollarsbyconvertingtheexpectedcashflowsintodollarsusingforwardrates.TheN-yearforwardrate(Equation.30.3inChapter30)expressedinThus,thedollarexpectedcashflowsarethepesocashflows(fromtheearliertimeline)convertedattheappropriateforwardrate(wedividebytheforwardratebecauseitisinTextbookExample31.4(4of5)Thedollarexpectedcashflowsarethereforesothedollarcashflowsgrowatabout5%peryear.TheNPVofthesecashflowsisWhichNPVmoreaccuratelyrepresentsthebenefitsoftheexpansion?Theanswerdependsonthesourceofthedifference.Tocomputethedollarexpectedcashflowsbyconvertingthepesoexpectedcashflowsattheforwardrate,wemustaccepttheassumptionthatspotratesandtheprojectcashflowsareuncorrelated.Thedifferencemightsimplyreflectthatthisassumptionfailedtohold.AnotherpossibilityisthatthedifferencereflectsestimationerrorintherespectiveWACCestimates.TextbookExample31.4(5of5)IfCamachoisrelativelyconfidentinitsassumptionsaboutspotratesanditsWACCestimates,athirdpossibilityisthatMexicanandU.S.capitalmarketsarenotintegrated.Inthiscase,Camacho,becauseofitsaccesstoU.S.capitalmarkets,mighthaveacompetitiveadvantage.PerhapsothercompanieswithwhichitiscompetingforthepurchaseofXtapaareallMexicanfirmsthatdonothaveaccesstocapitalmarketsoutsideofMexico.HenceCamachocanraisecapitalatacheaperrate.Ofcourse,thisargumentalsorequiresthatotherU.S.companiesarenotcompetingforthepurchaseofXtapa.Camacho,however,mighthavespecialknowledgeofXtapa’smarketsthatotherU.S.-basedcompanieslack.ThisknowledgewouldgiveCamachoacompetitiveadvantageintheproductmarketoverotherU.S.companiesandputsitonanequalfootingintheproductmarketwithotherMexicancompanies.BecauseithasacompetitiveadvantageincapitalmarketsoverotherMexicancompanies,theNPVofthepurchaseispositiveforCamacho,butzerofortheotherbiddersforXtapa.AlternativeExample31.4(1of4)ValuingaForeignAcquisitioninaSegmentedMarketProblemTheBlueMuteGroupisconsideringtheacquisitionofaPeruvianfirm,DiscursoVerde.TheacquisitionshouldincreaseBlueMute’sfreecashflowby$4millionPeruvianSolperyearandgrow2%peryear.Theacquisitionwouldcost$30millionSol.Thecurrentexchangerateis4SolperU.S.dollarandtheSolisexpectedtodepreciaterelativetotheU.S.dollarby3%peryear.IftheSolWACCis10%andtheU.S.WACCis7%,whatistheNPVoftheacquisitioninSolanddollars?TextbookExample31.4(2of4)SolutionTheNPVoftheexpansionattheSolWACCis:Convertingtodollars,theNPVisTextbookExample31.4(3of4)Convertingthefreecashflowstodollarsfirstresultsinannualcashflowsof:Thedollarcostoftheprojectis:SincetheSolfreecashflowsareexpectedtogrowat2%annuallyandtheSolisexpectedtodepreciate3%eachyearagainstthedollar,thedollargrowthintheFreeCashFlowswillbe:TextbookExample31.4(4of4)TheNPVusingthedollarWACCis:31.5CapitalBudgetingwithExchangeRisk(1of8)ThefinalissuethatariseswhenafirmisconsideringaforeignprojectisthatthecashflowsoftheprojectmaybeaffectedbyexchangerateriskTheworkingassumptionmadethusfaristhattheproject’sfreecashflowsareuncorrelatedwiththespotexchangerates31.5CapitalBudgetingwithExchangeRisk(2of8)ReconsiderwhathappensiftheItyesiprojectintheUnitedKingdomimportssomematerialsfromtheUnitedStatesInthiscase,theproject’spoundfreecashflowswillbecorrelatedwithexchangerates31.5CapitalBudgetingwithExchangeRisk(3of8)Ifthevalueofthedollarappreciatesagainstthepound,thepoundcostofthesematerialswillincrease,therebyreducingthepoundfreecashflowsIfthedollardepreciates,thenthepoundfreecashflowswillincreaseTheassumptionthatchangesinthefreecashflowsareuncorrelatedwithchangesintheexchangerateisviolated31.5CapitalBudgetingwithExchangeRisk(4of8)Wheneveraprojecthascashflowsthatdependonthevaluesofmultiplecurrencies,themostconvenientapproachistoseparatethecashflowsaccordingtothecurrencyonwhichtheydepend31.5CapitalBudgetingwithExchangeRisk(5of8)AssumemillionofItyesi’scostsaredenominatedinpounds