International Corporate Finance

International Corporate Finance

Value Creation with Currency Derivatives in Global Capital Markets
Wiley Finance 2. Aufl.

von: Laurent L. Jacque

76,99 €

Verlag: Wiley
Format: PDF
Veröffentl.: 30.10.2019
ISBN/EAN: 9781119550488
Sprache: englisch
Anzahl Seiten: 832

DRM-geschütztes eBook, Sie benötigen z.B. Adobe Digital Editions und eine Adobe ID zum Lesen.


As globalization is redefining the field of corporate finance, international finance is now part and parcel of the basic literacy of any financial executive. This is why International Corporate Finance is a “must” text for upper-undergraduates, MBAs aspiring to careers in global financial services and budding finance professionals. International Corporate Finance offers thorough coverage of the international monetary system, international financing, foreign exchange risk management and cross-border valuation. Additionally, the book offers keen insight on how disintermediation, deregulation and securitization are re-shaping global capital markets. What is different about International Corporate Finance? Each chapter opens with a real-life mini-case to anchor theoretical concepts to managerial situations. Provides simple decision rules and “how to do” answers to key managerial issues. Cross-border Mergers & Acquisitions, Project Finance, Islamic Finance, Asian Banking & Finance are completely new chapters that no other textbooks currently cover. Accompanied with a comprehensive instructor support package which includes case studies, an Instructor’s Manual, PowerPoint slides, Multiple Choice Questions and more.
Preface xvii Acknowledgments xxv About the Author xxvii Chapter 1 What is International Corporate Finance? 1 The Uneven Reach of Globalization 2 The Rise of the Multinational Corporation 3 What is Different about International Corporate Finance? 6 Risks in the Wonderland of International Finance 8 Internationalization and the Locus of the Finance Function 12 The International Control Conundrum 15 Exploiting The Multinational Enterprise System 16 Summary 19 Questions for Discussion 19 References 20 Part One The International Monetary Environment 21 Chapter 2 Exchange Rates Regimes 23 Some First Principles about Exchange Rate Determination 24 World Map of Exchange Rate Regimes: The Flexibility × Convertibility Space 29 Floating Exchange Rates 31 Stabilized or Pegged Exchange Rates 39 Controlled Exchange Rates 46 To Float or to Fix: The Trilemma of International Finance 49 Summary 50 Questions for Discussion 51 Problems 52 Internet Exercises 54 References 54 Chapter 3 Yesterday and Yesteryear 57 Chronology of the International Monetary System 58 The Gold Standard (1878–1914, 1925–1931) 61 The Bretton Woods System (1944–1971) 63 Managed Floating Exchange Rates (1973–Present) 67 European Monetary System and the European Currency Unit (1979–1999) 68 Emerging Markets Currency Regimes and Crises 72 European Monetary Union and the Birth of the Euro (1999–Present) 76 Today and Tomorrow: The Current Map of Exchange Rates 84 Summary 86 Questions for Discussion 87 Problems 88 Internet Exercises 90 References 90 Case Study 3.1: Will the Eurozone Shutter? Plant Location and Exchange Rates for Hyundai 91 Chapter 4 The Balance of Payments 99 Fundamentals of Balance of International Payments Accounting 100 Current Account 105 Financial Account 107 Official Reserve Account 109 Statistical Discrepancies: Errors and Omissions 111 Balance of Payments and the Foreign Exchange Market 111 Debtor Versus Creditor Nations 115 Linking the Balance of Payments to National Income 118 Summary 119 Questions for Discussion 120 Problems 121 Internet Exercises 122 References 124 Case Study 4.1: When One of the BRIC(k)s Falls: Trials and Tribulations of the Indian Rupee 124 Part Two The Foreign Exchange Market and Currency Derivatives 129 Chapter 5 The Foreign Exchange Market 131 How Forex is Traded: The Institutional Framework 132 Foreign Exchange Products 140 Exchange Rate Quotations 142 Summary 155 Questions for Discussion 156 Problems 157 Internet Exercises 160 References 160 Case Study 5.1: Banco Mercantil Internacional’s Forex Losses 160 Chapter 6 Interest Rate Arbitrage and Parity 165 Interest Rate Arbitrage Theorem 166 Interest Rate Parity 174 Uncovered Interest Rate Arbitrage and the Carry Trade 181 Summary 184 Appendix 6A: Transaction Costs: Interest Rate Arbitarge with Bid-Ask Spreads (Advanced) 185 Appendix 6B: Interest Rate Parity and Asymmetric Taxation 187 Questions for Discussion 188 Problems 188 Internet Exercises 195 References 195 Case Study 6.1: Brazil Rede Globo’s Short-Term Funding 195 Chapter 7 Purchasing Power Parity and the International Parities Framework 199 Purchasing Power Parity 200 The Linkages Between Interest, Inflation, and Exchange Rates 213 Questions for Discussion 220 Problems 220 Internet Exercises 221 References 222 Chapter 8 Currency Futures and Options 223 A Brief History of Derivatives 223 Currency Futures 228 Currency Options 234 Risk Profile of Currency Options 236 Option Strategies 239 Put-Call Parity Theorem 245 The Valuation of Currency Options 248 Derivatives and Zero-Premium Options 254 Summary 258 Appendix 8A: Pricing Currency Options 259 Questions for Discussion 261 Problems 261 Internet Exercises 264 References 264 Case Study 8.1: Daewoo’s Unorthodox Funding Strategy 264 Part Three International Financing 269 Chapter 9 The International Financial Sector and the Dynamics of Global Capital Markets 271 Financing as a Global Procurement Decision 272 The Financial System and Financial (Dis)Intermediation 273 Securitization and the (Lower) Cost of Consumer Financing 281 Deregulation 287 Mapping the Financial System/Capital Market Emergence Process 290 Summary 297 Questions for Discussion 298 Problems 298 Internet Exercises 300 References 300 Case Study 9.1: How Thai Airways FOILs Jet Fuel Price Risk 301 Chapter 10 Sourcing Equity Globally 307 A Grand Tour of Equity Markets 308 Global Equity Financing as a Procurement Decision 317 Internationalizing the Cost of Capital: The Landmark Case of Novo Industri 318 Why do Firms Cross-List? 323 How to Source Equity Globally 325 Summary 331 Questions for Discussion 332 Problems 333 Internet Exercises 334 References 335 Case Study 10.1: Jazztel’s Foreign IPO 335 Chapter 11 Sourcing Debt from Global Bond Markets 345 The International Debt Procurement Decision 346 Grand Tour of the Global Debt Market 347 Cost of Foreign Currency Debt Financing 356 Debt Refinancing 361 The International Debt Financing Conundrum 364 Summary 366 Questions for Discussion 366 Problems 367 Internet Exercises 372 References 372 Case Study 11.1: McDonald’s Dim Sum Bonds: “Lovin’ It” 372 Chapter 12 Currency, Interest Rate, and Credit Default Swaps 377 Currency Swaps 378 Interest Rate Swaps 383 Credit Default Swaps 391 Summary 397 Questions for Discussion 397 Problems 398 Internet Exercises 400 References 400 Case Study 12.1: The Demise of AIG 400 Chapter 13 International Trade Financing 405 A Brief History of International Trade 406 The Trilogy of Risks in Exporting 407 Managing Credit Risk 409 Managing Currency Risk 410 Managing Country Risk 411 The Mechanics of Trade Financing with a Letter of Credit 412 Financing Exports 415 Pre-Export Financing 418 Government-Sponsored Export Credit Agencies 422 Summary 423 Questions for Discussion 424 Problems 424 Internet Exercises 426 Case Study 13.1: Warrick Pharmaceuticals Inc. 426 Part Four Managing Foreign Exchange Risk 431 Chapter 14 The Case for Foreign Exchange Risk Management 433 Defining Foreign Exchange Risk Management and its Objectives 435 Can Hedging Currency Risk Increase the Value of the Firm? 437 When is Hedging Currency Risk Irrelevant? 440 From Hedging to Managing Currency Risk 441 The Building Blocks of Foreign Exchange Risk Management 443 Summary 445 Appendix 14A: Foreign Exchange Risk Management: What do Firms do? 446 Questions for Discussion 446 References 447 Case Study 14.1: Bio-Oils Energy S.L. 447 Chapter 15 Forecasting Exchange Rates 455 Market-Based Forecasts 456 Model-Based Forecasts: Technical Versus Econometric Modeling Approaches 461 Composite Forecasts 468 How to Use Currency Forecasts 469 Summary 470 Appendix 15A: Forecasting Pegged Yet Adjustable Exchange Rates 470 Questions for Discussion 476 Problems 477 Internet Exercises 479 References 479 Case Study 15.1: Euclides Engineering, Ltd. 480 Chapter 16 Managing Transaction Exposure 483 Measuring Transaction Exposure 484 The Mechanics of Hedging Transaction Exposure 488 Hedging and Financing International Trade 500 Eliminating Foreign Exchange Rate Risk in Long-Term Contracts 501 Exchange Rate Risk in International Bidding 508 How Much to Hedge Transaction Exposure 512 Summary 513 Questions for Discussion 514 Problems 514 References 520 Case Study 16.1: Hedging Currency Risk at TT Textiles 521 Chapter 17 Managing Translation Exposure 531 What is Translation Exposure? 531 Should Translation Exposure be Hedged? 532 Alternative Translation Methods 533 The Mechanics of Contractual Hedging 539 The Mechanics of Financial Hedging 546 Summary 550 Appendix 17A: Accounting Valuation and the Concept of Translation Exposure 551 Questions for Discussion 555 Problems 555 Internet Exercises 560 References 560 Case Study 17.1: Wilkinson Sword’s Trials and Tribulations in Turkey 560 Chapter 18 Managing Economic Exposure 567 A Taxonomy of Economic Exposures 568 Toward an Operational Measure of Economic Exposure 575 Managing Operating Exposure 578 Summary 583 Questions for Discussion 584 Problems 584 References 587 Case Study 18.1: Peugeot Citroën SA’s Economic Exposure to the South Korean Won 588 Part Five Cross-Border Valuation and Foreign Investment Analysis 591 Chapter 19 Foreign Market Entry Strategies and Country Risk Management 593 Contractual Modes of Foreign Market Entry 594 Foreign Market Entry Through Foreign Direct Investments 599 Country Risk 600 Costs/Benefits of Foreign Direct Investment to Host Countries 608 Summary 612 Questions for Discussion 613 Internet Exercises 613 References 614 Case Study 19.1: Carrefour’s Indian Entry Strategy 614 Chapter 20 International Capital Budgeting 619 The Foreign Direct Investment Decision-Making Process 619 A Primer on Evaluating Investment Opportunities 622 What is Different About Evaluating Foreign Investment Proposals? 624 Case Study: Renault Invests in India 629 Global Cost of Equity Capital 639 Optimal Worldwide Capital Structure 643 Summary 644 Appendix 20A: Adjusted Present Value 645 Appendix 20B: Real Options 648 Questions for Discussion 656 Problems 656 Internet Exercises 660 References 660 Chapter 21 Cross-Border Mergers and Acquisitions 661 A Brief History of Mergers and Acquisitions 662 The Industrial Logic of Mergers and Acquisitions 662 Are Cross-Border Acquisitions Different? 664 Valuation of Foreign Acquisitions 671 Ciments Lafarge Enters Vietnam 673 Summary 680 Questions for Discussion 681 Problems 681 Internet Exercises 683 Case Study 21.1: Etihad’s Proposed Acquisition of Malaysia Airlines 684 Chapter 22 Project Finance 689 What is Project Finance? 690 Anatomy of Project Finance: The Case of the Ras Laffan Liquefied Natural Gas Company 696 Valuing Project Finance: The Esty Model 696 Summary 704 Questions for Discussion 705 References 705 Case Study 22.1: Clean Infra Ltd Project Finance 706 Chapter 23 Global Investing 713 The Basics of International Portfolio Management 714 The Gains from International Diversification 722 Trials and Tribulations in Foreign Equity Investing 729 Currency Risk in Global Investing 730 Alternative Modes of Investing in Foreign Equity 733 The New Landscape of Global Investing 734 Summary 741 Appendix 23A: In Search of Alpha at Global Thematic Partner is found on the Book Website at 741 Questions for Discussion 742 Problems 742 Internet Exercises 744 References 744 Part Six Managing the Multinational Financial System 747 Chapter 24 Managing the Multinational Financial System 749 A Primer on International Taxation 749 The Multinational Financial System 753 Exploiting the System’s Potential to Minimize Global Tax Liabilities 755 Designing a Global Dividends Remittance Strategy 761 Centralizing Cash Management 765 Summary 774 Questions for Discussion 775 Problems 775 Internet Exercises 777 References 777 Appendix: Answers to Selected Problems 779 About the Companion Website 787 Index 789 Continued on the Website Chapter 25 International Control Conundrum (extension of Part 6) 805 A Primer on Managerial Control 806 The International Control Conundrum 809 EVA-Based Contingent Budgeting and Performance Assessment 815 Summary 821 Appendix 25A: Applying The EVA-Based Control System 822 Questions for Discussion 826 References 826 Chapter 26 Asian Finance and Banking (extension of Part 3) 827 Asian Finance: Common Historical Roots, Diverse Paths 828 Adaptive Responses: Crises and Institutional Change in Asian Finance 832 Business Organization, Corporate Ownership, and Governance 836 Corporate Governance 841 Capital Market Development 846 Capital Structure and the Cost of Capital 855 Performance, Value, and the Practice of Corporate Finance 857 Summary 860 Questions for Discussion 860 References 861 Chapter 27 Islamic Banking and Finance (extension of Part 3) 863 The Underlying Principles of Islamic Finance 864 The Evolution of Islamic Finance 868 Islamic Financing Products 872 Shariah-Compliant Asset Management 879 Islamic Banking 880 Islamic Finance and the Global Financial Meltdown 885 Summary 886 Questions for Discussion 888 References 888 Case Study 27.1: When Emirates Airline Taps Islamic Finance 888 Appendix 23A to Chapter 23: In Search of Alpha at Global Thematics Partners (GTP) 894 Glossary 899
Laurent L. Jacque (Boston, MA) is the Walter B. Wriston Professor of International Finance & Banking at the Fletcher School of Law and Diplomacy (Tufts University) and Director of its International Business Studies Program. From 2004 to 2007 he was Fletcher’s Academic Dean and as such responsible for the design and the establishment of the new Master of International Business degree and the Center for Emerging Market Enterprises. Since 1990 he has also held a joint appointment at the HEC School of Management (France) as a Professor of Economics, Finance, and International Business.
Praise for International Corporate Finance "Professor Jacque's textbook allies conceptual rigor with practical relevance drawn from multiple case studies. A highly recommended textbook to those who teach international finance at both the undergraduate and graduate levels." —GABRIEL HAWAWINI, the Henry Grunfeld Chaired Professor of Investment Banking and former Dean, INSEAD "Professor Jacque's new text book serves as a right-sized, real-life manual of the complexity and adventure of international finance. Most importantly, it accomplishes this goal without short-cutting the relevant theoretical concepts underpinning the instruments of global finance. This book is compass, interactive study manual, theoretical reference guide, and last but not least, case-based financial adventure novel, all in one." —OLIVER S KRATZ, PhD, CEO of Global Thematic Partners "In this book, Laurent Jacque does a superb job of combining modern concepts of international finance with a keen eye for their application in the context of the business firm and exceptional exposition that places a premium on capturing, simplifying and retaining what are sometimes complex relationships. It is a book that deserves to quickly become one of the leaders in its field." —INGO WALTER, Seymour Milstein Professor of Finance, Corporate Governance and Ethics, Stern School of Business, New York University A geocentric perspective on finance for a globalizing world As globalization is redefining the field of corporate finance, international finance is now part and parcel of the basic literacy of any financial executive. This is why International Corporate Finance is a "must" text for upper-undergraduates, MBAs and young professionals aspiring to careers in global financial services. It offers comprehensive coverage of: International monetary system and currency markets Global financial markets including Asian banking and Islamic Finance Geocentric debt and equity multi-currency financing strategies Currency derivatives and foreign exchange risk management Cross-border valuation, mergers & acquisitions and project finance Unique to the book is that each chapter opens with a real-life mini-case to anchor theoretical concepts to managerial situations and also provides simple decision rules and "how to do" answers to key managerial finance issues. Cross-border Mergers & Acquisitions, Project Finance, Islamic Finance, Asian Banking & Finance and International Control Conundrum are completely new chapters that no other textbooks currently cover. The book also includes twenty concise and original case studies for class discussion and is accompanied with a comprehensive instructor support package which includes case studies, an Instructor's Manual, PowerPoint slides, and more.

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