跨国公司财务管理讲义.ppt

1、跨国公司财务管理,艾伦.C.夏皮罗(Alan C. Shapiro) 著 赵锡军 编审 顾苏秦 译校,PART I ENVIRONMENT OF INTERNATIONAL FINANCIAL MANAGEMENT,CHAPTER 1 INTRODUCTION: MULTINATIONAL ENTERPRISE AND MULTINATIONAL FINANCIAL MANAGEMENT,Learning Objectives, To understand the nature and benefits of globalization To explain why multinational

2、 corporations are the key players in international economic competition today To classify the three historical types of multinational corporation (MNC) and explain their motivations for international expansion To explain why managers of MNCs need to exploit rapidly changing global economic condition

3、s and why political policy makers must also be concerned with the same changing conditions,Learning Objectives, To identify the advantages of being multinational, including the benefits of international diversification To describe the general importance of financial economics to multinational financ

4、ial management and the particular importance of the concepts of arbitrage, market efficiency, capital asset pricing, and total risk To characterize the global financial marketplace and explain why MNC managers must be alert to capital market imperfections and asymmetries in tax regulations,1.1 THE R

5、ISE OF THE MULTINATIONAL CORPORATION,A multinational corporation (MNC) is a company engaged in producing and selling goods or services in more than one country. A brief taxonomy of the MNC and its evolution Raw-Materials Seekers. Raw-materials seekers were the earliest multinationals, the villains o

6、f international business. Market Seekers. The market seeker is the archetype of the modern multinational firm that goes overseas to produce and sell in foreign markets. Cost Minimizers. These firms seek out and invest in lower cost production sites overseas (for example, Hong Kong, Taiwan, and Irela

7、nd) to remain cost-competitive both at home and abroad.,1.1 THE RISE OF THE MULTINATIONAL CORPORATION,the true multinational corporation is characterized more by its state of mind than by the size and worldwide dispersion of its assets. the essential element that distinguishes the true multinational

8、 is its commitment to seeking out, undertaking, and integrating manufacturing, marketing, R the North American Free Trade Agreement (NAFTA),1.3 MULTINATIONAL FINANCIAL MANAGEMENT: THEORY AND PRACTICE,The main objective of multinational financial management is to maximize shareholder wealth as measur

9、ed by share price. Shareholders are the legal owners of the firm and management has a fiduciary obligation to act in their best interests. Financial management is traditionally separated into two basic functions: the acquisition of funds (financing decision) and the investment of those funds (invest

10、ment decision). The risks of multinational management include exchange and inflation risks; international differences in tax rates; multiple money markets, often with limited access; currency controls; and political risks, such as sudden or creeping expropriation. The most advantage of MNC is the in

11、ternational diversification of markets and production sites.,1.3 MULTINATIONAL FINANCIAL MANAGEMENT: THEORY AND PRACTICE,Some concepts of financial economics: Arbitrage Market efficiency Capital Asset Pricing Risk classification,1.4 OUTLINE OF THE BOOK,This book is divided into five parts. Part I: E

12、nvironment of International Financial Management Part II: Foreign Exchange Risk Management Part III: Financing the Multinational Corporation Part IV: Foreign Investment Analysis Part V: Multinational Working Capital Management,PART I ENVIRONMENT OF INTERNATIONAL FINANCIAL MANAGEMENT,CHAPTER 2 THE FU

13、NDAMENTAL OF INTERNATIONAL FINANCE,Learning Objectives, To explain the concept of an equilibrium exchange rate To identify the basic factors affecting exchange rates in a floating exchange rate system To calculate the amount of currency appreciation or depreciation associated with a given exchange r

14、ate change To distinguish between a free float, a managed float, a target-zone arrangement, and a fixed-rate system of exchange rate determination To distinguish between the current account, the financial account, and the official reserves account and describe the links among these accounts,2.1 SETT

15、ING THE EQUILIBRIUM SPOT EXCHANGE RATE,Exchange rates can be for spot or forward delivery. A spot rate is the price at which currencies are traded for immediate delivery, or in two days in the interbank market. A forward rate is the price at which foreign exchange is quoted for delivery at a specifi

16、ed future date. The exchange rates are market-clearing prices that equilibrate supplies and demands in the foreign exchange market.,2.1 SETTING THE EQUILIBRIUM SPOT EXCHANGE RATE,Factors that Affect the Equilibrium Exchange Rate: As the supply and demand schedules for a currency change over time, th

17、e equilibrium exchange will also change. Relative Inflation Rates Relative Interest Rates Relative Economic Growth Rates Political and Economic Risk Expectation and Asset Market model Calculating Exchange Rate Change,2.2 ALTERNATIVE EXCHANGE RATE SYSTEMS,The international monetary system refers prim

18、arily to the set of policies, institutions, practices, regulations, and mechanisms that determine the rate at which one currency is exchanged for another. This section considers five market mechanisms for establishing exchange rates: free float managed float target-zone arrangement fixed-rate system

19、 the current hybrid system.,2.3 BALANCE-OF-PAYMENT CATEGORIES,The balance of payment is an accounting statement that summarizes all the economic transactions between residents of the home country and the residents of all other countries. Currency inflows are recorded as credits, and outflows are rec

20、orded as debits. There are three principal balance-of-payments categories: 1. Current account 2. Capital account 3. Financial account For most countries, only the current and financial accounts are significant.,PART I ENVIRONMENT OF INTERNATIONAL FINANCIAL MANAGEMENT,CHAPTER 3 COUNTRY RISK ANALYSIS,

21、Learning Objectives, To define what country risk means from the standpoint of an MNC To describe the social, cultural, political, and economic factors that affect the general level of risk in a country and identify key indicators of country risk and economic health To describe what we can learn abou

22、t economic development from the contrasting experiences of a variety of countries To describe the economic and political factors that determine a countrys ability and willingness to repay its foreign debts,3.1 MEASURING POLITICAL RISK,Expropriation is the most obvious and extreme form of political r

23、isk,. There are other significant political risks, including currency or trade controls, changes in tax or labor laws, regulatory restrictions, and requirements for additional local production. Factors in political risk forecasting model Political Stability Economic Factors Subjective Factors Politi

24、cal Risk and Uncertain Property Rights A useful indicator of the degree of political risk is the seriousness of capital flight.,3.2 ECONOMIC AND POLITICAL FACTORS UNDERLYING COUNTRY RISK,key factors that determine the economic performance of a country and its degree of risk Fiscal Irresponsibility M

25、onetary Instability Controlled Exchange Rate System Wasteful Government Spending Resource Base Country Risk and Adjustment to External Shocks Key Indicators of Country Risk and Economic Health,3.3 COUNTRY RISK ANALYSIS IN INTERNATIONAL BANKING,From a banks standpoint, country risk is the possibility

26、 that borrowers in a country will be unable or unwilling to service or repay their debts to foreign lenders in a timely manner. What ultimately determines a nations ability to repay foreign loans is that nations ability to generate U.S. dollars and other hard currencies. The Governments Cost/Benefit

27、 Calculus Lessons from the International Debt Crisis,PART II FOREIGN EXCHANGE RISK MANAGEMENT,CHAPTER 4 MEASURING AND MANAGING TRANSLATION AND TRANSACTION EXPOSURE,Learning Objectives, To define translation and transaction exposure and operating exposure, distinguish them. To describe the four princ

28、ipal currency translation methods available and to calculate translation exposure using these different methods To identify the basic hedging strategy and techniques used by firms to manage their currency transaction and translation risks To describe the costs and benefit associated with using the d

29、ifferent hedging techniques To describe and assess the economic soundness of the various corporate hedging objectives,4.1 ALTERNATIVE MEASURES OF FOREIGN EXCHANGE EXPOSURE,The three basic types of exposure are translation exposure, transaction exposure, and operating exposure. Transaction exposure a

30、nd operating exposure combine to form economic exposure. Translation exposure, also known as accounting exposure, arises from the need, for purposes of reporting and consolidation, to convert the financial statements of foreign operations from the local currencies (LC) involved to the home currency

31、(HC). Transaction exposure results from transactions that give rise to known, contractually binding future foreign-currency-denominated cash inflows or outflows. Operating exposure measures the extent to which currency fluctuations can alter a companys future operating cash flows, that is, its futur

32、e revenues and costs.,4.2 ALTERNATIVE CURRENCY TRANSLATION METHODS,Companies with international operations will have foreign-currency-denominated assets and liabilities, revenues, and expenses. The financial statements of an MNCs overseas subsidiaries must be translated from local currency to home c

33、urrency before consolidation with the parents financial statements. Four principal translation methods are available: the current/noncurrent method, the monetary/nonmonetary method, the temporal method, and the current rate method. In practice, there are also variations of each method.,4.2 ALTERNATI

34、VE CURRENCY TRANSLATION METHODS,Current/Noncurrent method all the foreign subsidiarys current assets and liabilities are translated into home currency at the current exchange rate. Each noncurrent asset or liability is translated at its historical exchange ratethat is, at the rate in effect at the t

35、ime the asset was acquired or the liability was incurred. The income statement is translated at the average exchange rate of the period, except for those revenues and expense items associated with noncurrent assets or libilities.,4.2 ALTERNATIVE CURRENCY TRANSLATION METHODS,Monetary/Nonmonetary Meth

36、od Monetary items (for example, cash, accounts payable and receivable, and long-term debt) are translated at the current rate; nonmonetary items (for example, inventory, fixed assets, and long-term investments) are translated at historical rates. Income statement items are translated at the average

37、exchange rate during the period, except for revenue and expense items related to nonmonetary assets and liabilities.,4.2 ALTERNATIVE CURRENCY TRANSLATION METHODS,Temporal Method Under the temporal method, inventory is normally translated at the historical rate, but it can be translated at the curren

38、t rate if the inventory is shown on the balance sheet at market values. in the temporal method, it is based on the underlying approach to evaluating cost (historical versus market). Income statement items normally are translated at an average rate for the reporting period. Current Rate Method The cu

39、rrent rate method is the simplest: All balance sheet and income items are translated at the current rate.,4.4 DESIGNING A HEDGING STRATEGY,Hedging a particular currency exposure means establishing an offsetting currency position so as to lock in a dollar (home currency) value for the currency exposu

40、re and thereby eliminate the risk posed by currency fluctuations. The usefulness of a particular hedging strategy depends on both acceptability and quality. The objectives in management bahavior Minimize translation exposure; Minimize earnings fluctuations owing to exchange rate changes; Minimize tr

41、ansaction exposure; Minimize economic exposure; Minimize foreign exchange risk management costs; Avoid surprises,4.4 DESIGNING A HEDGING STRATEGY,Costs and Benefits of Standard Hedging Techniques Exposure Netting Exposure netting involves offsetting exposures in one currency with exposures in the sa

42、me or another currency, where exchange rates are expected to move in a way such that losses (gains) on the first exposed position will be offset by gains (losses) on the second currency exposure. Accounting for Hedging and FASB 133,4.5 MANAGING TRANSLATION EXPOSURE,Firms have three available methods

43、 for managing their translation exposure: (1) adjusting fund flows, (2) entering into forward contracts, and (3) exposure netting. Funds adjustment involves altering either the amounts or the currencies (or both) of the planned cash flows of the parent or its subsidiaries to reduce the firms local c

44、urrency accounting exposure. Evaluating Alternative Hedging Mechanisms Ordinarily, the selection of a funds-adjustment strategy cannot proceed by evaluating each possible technique separately without risking suboptimization.,4.6 MANAGING TRANSACTION EXPOSURE,Various techniques for managing transacti

45、on exposure Forward Market Hedge Money-Market Hedge Risk shifting Pricing Decision Exposure netting Currency Risk Sharing Currency Collars Cross-Hedging Foreign Currency Options,PART II FOREIGN EXCHANGE RISK MANAGEMENT,CHAPTER 5 MEASURING AND MANAGING ECONOMIC EXPOSURE,Learning Objectives, To define

46、 economic exposure and exchange risk and distinguish between the two To define operating exposure and distinguish between it and transaction exposure To identify the basic factors that determine the foreign exchange risk faced by a particular company or project To describe the marketing, production,

47、 and financial strategies that are appropriate for coping with the economic consequences of exchange rate changes To explain how companies can develop contingency plans to cope with exchange risk and the consequences of their ability to rapidly respond to currency changes To identify the role of the

48、 financial executive in facilitating the operation of an integrated exchange risk management program,5.1 FOREIGN EXCHANGE RISK AND ECONOMIC EXPOSURE,The most important aspect of foreign exchange risk management is to incorporate currency change expectations into all basic corporate decisions. Econom

49、ic exposure can be separated into two components: transaction exposure and operating exposure. The exchange rate changes that give rise to operating exposure are real exchange rate changes. The real exchange rate is defined as the nominal exchange rate adjusted for changes in the relative purchasing

50、 power of each currency since some base period.,5.2 THE ECONOMIC CONSEQUENCES OF EXCHANGE RATE CHANGES,Transaction exposure arises out of the various types of transactions that require settlement in a foreign currency. The greater a companys flexibility to substitute between home-country and foreign

51、-country inputs or production, the less exchange risk the company will face. The major conclusion is that the sector of the economy in which a firm operates (export, import-competing, or purely domestic), the sources of the firms inputs (imports, domestic traded or nontraded goods), and fluctuations

52、 in the real exchange rate are far more important in delineating the firms true economic exposure than is any accounting definition.,5.3 IDENTIFYING ECONOMIC EXPOSURE,Aspen Skiing Company Petrleos Mexicanos Toyota Motor Company,5.4 CALCULATING ECONOMIC EXPOSURE,Spectrum Manufacturing AB example Spec

53、trums Accounting Exposure Spectrums Economic Exposure Scenario 1: All Variables Remain the Same. Scenario 2: Krona Sales Prices and All Costs Rise; Volume Remains the Same. Scenario 3: Partial Increases in Prices, Costs, and Volume.,5.6 MANAGING OPERATING EXPOSURE,Because currency risk affects all f

54、acets of a companys operations, it should not be the concern of financial managers alone. Marketing Management of Exchange Risk Market Selection Pricing Strategy Product Strategy Production Management of Exchange Risk Input Mix Shifting Production Among Plants Plant Location Raising Productivity Pla

55、nning for Exchange Rate Changes Financial Management of Exchange Risk,PART III FINANCING THE MULTINATIONAL CORPORATION,CHAPTER 6 INTERNATIONAL FINANCING AND NATIONAL CAPITAL MARKETS,Learning Objectives, To describe trends and differences in corporate financing patterns around the world To define sec

56、uritization and explain the forces that underlie it and how it has affected the financing policies of MNCs To explain why bank lending is on the decline worldwide and how banks have responded to their loss of market share To explain what is meant by the globalization of financial markets and identif

57、y the factors that have affected the process of globalization To describe the external medium and long-term financing options available to the multinational corporation To identify the functions and consequences of financial markets To describe the links between national and international capital ma

58、rkets To describe the types and roles of development banks,6.1 CORPORATE SOURCES AND USES OF FUNDS,Firms have three general sources of funds available: internally generated cash, short-term external funds, and long-term external funds. Financial Markets versus Financial Intermediaries Bank borrowing

59、 vs sell securities Financial Systems and Corporate Governance effective corporate governance requires that everyone involved in governing the company must be assigned a carefully chosen role and they must be provided with responsibility, authority, and accountability, all to be done with the paramo

60、unt objective of creating shareholder value. The difference in financial systems has real consequences for financial structures. Globalization of Financial Markets,6.2 NATIONAL CAPITAL MARKETS AS INTERNATIONAL FINANCIAL CENTERS,The principal functions of a financial market and its intermediaries are