International financial management

Preface Selected Currencies and Symbols Symbols and Acronyms Part 1 The Global Financial Management Environment 1 Introduction to International Financial Management 1.1 The Rise of the International Company 1.2 The Internationalization of Business and Finance 1.3 International Financial Management: Theory and Practice 1.4 Outline of the Text Appendix 1A The Origins and Consequences of International Trade 2 Exchange Rate Determination 2.1 Setting the Equilibrium Spot Exchange Rate 2.2 Expectations and the Asset Market Model of Exchange Rates 2.3 The Fundamentals of Central Bank Intervention 2.4 The Equilibrium Approach to Exchange Rates 2.5 Summary and Conclusions 3 The International Monetary System 3.1 Alternative Exchange Rate Systems 3.2 A Brief History of the International Monetary System 3.3 The European Monetary System and Monetary Union 3.4 Emerging Market Currency Crises 3.5 Summary and Conclusions 4 Currencies: Expectations, Parities and Forecasting 4.1 Arbitrage and the Law of One Price 4.2 Purchasing Power Parity 4.3 The Fisher Effect 4.4 The International Fisher Effect 4.5 Interest Rate Parity Theory 4.6 The Relationship Between the Forward Rate and the Future Spot Rate 4.7 Currency Forecasting 4.8 Summary and Conclusions 5 The International Monetary System and The Balance of Payments 5.1 Balance-of-Payments Categories 5.2 The International Flow of Goods, Services and Capital 5.3 Coping with the Current-Account Deficit 5.4 Summary and Conclusions 6 Country Risk 6.1 Measuring Political Risk 6.2 Economic and Political Factors Underlying Country Risk 6.3 Country Risk Analysis in International Lending 6.4 Summary and Conclusions Part 2 Currency and Derivatives Markets 7 Currency Markets 7.1 Organization of the Foreign Exchange Market 7.2 The Spot Market 7.3 The Forward Market 7.4 Summary and Conclusions 8 Currency Derivatives 8.1 Futures Contracts 8.2 Currency Options 8.3 Reading Currency Futures and Options Prices 8.4 Summary and Conclusions Appendix 8A Option Pricing Using Black-Scholes Appendix 8B Put-Call Option Interest Rate Parity 9 Interest Rate Derivatives 9.1 Interest Rate and Currency Swaps 9.2 Interest Rate Forwards and Futures 9.3 Structured Notes 9.4 Credit Default Swaps 9.5 Summary and Conclusions Part 3 Managing Currency Risks 10 Translation and Transaction Exposure 10.1 Alternative Measures of Foreign Exchange Exposure 10.2 Alternative Currency Translation Methods 10.3 Transaction Exposure 10.4 Designing a Hedging Strategy 10.5 Managing Translation Exposure 10.6 Managing Transaction Exposure 10.7 Summary and Conclusions Appendix 10A Currency Translation in Practice 11 Economic Exposure 11.1 Foreign Exchange Risk and Economic Exposure 11.2 The Economic Consequences of Exchange Rate Changes 11.3 Identifying Economic Exposure 11.4 Calculating Economic Exposure 11.5 An Operational Measure of Exchange Risk 11.6 Managing Operating Exposure 11.7 Summary and Conclusions Part 4 Financing International Operations 12 International And Domestic Capital Markets 12.1 Corporate Sources and Uses of Funds 12.2 Domestic Capital Markets as International Financial Centers 12.3 Development Banks 12.4 Project Finance 12.5 Summary and Conclusions 13 International Financial Markets 13.1 The Eurocurrency Market 13.2 Eurobonds 13.3 Note Issuance Facilities and Euronotes 13.4 Euro-Commercial Paper 13.5 The Asia currency Market 13.6 Summary and Conclusions 14 The International Cost of Capital 14.1 The Cost of Equity Capital 14.2 The Weighted Average Cost of Capital for Foreign Projects 14.3 Discount Rates for Foreign Investments 14.4 The Cost of Debt Capital 14.5 Establishing a Worldwide Capital Structure 14.6 Valuing Low-Cost Financing Opportunities 14.7 Summary and Conclusions Part 5 International Capital Budgeting 15 International Portfolio Investment 15.1 The Risks and Benefits of International Equity Investing 15.2 International Bond Investing 15.3 Optimal International Asset Allocation 15.4 Measuring the Total Return from Foreign Portfolio Investing 15.5 Measuring Exchange Risk on Foreign Securities 15.6 Summary and Conclusions 16 Strategies For Foreign Direct Investment 16.1 Theory of the Multinational Corporation 16.2 The Strategy of Multinational Enterprise 16.3 Designing a Global Expansion Strategy 16.4 Summary and Conclusions 17 International Capital Budgeting 17.1 Basics of Capital Budgeting 17.2 Issues in Foreign Investment Analysis 17.3 Foreign Project Appraisal: The Case of International Machine Tools 17.4 Political Risk Analysis 17.5 Growth Options and Project Evaluation 17.6 Summary and Conclusions Appendix 17A Managing Political Risk Part 6 International Management of Working Capital 18 International Trade Management 18.1 Payment Terms in International Trade 18.2 Documents in International Trade 18.3 Financing Techniques in International Trade 18.4 Government Sources of Export Financing and Credit Insurance 18.5 Countertrade 18.6 Summary and Conclusions 19 Managing Working Capital 19.1 International Cash Management 19.2 Accounts Receivable Management 19.3 Inventory Management 19.4 Short-Term Financing 19.5 Summary and Conclusions 20 Financial Management for The Global Enterprise 20.1 The Value of the Multinational Financial System 20.2 Intercompany Fund-Flow Mechanisms: Costs and Benefits 20.3 Designing a Global Remittance Policy 20.4 Summary and Conclusions Glossary Index

Designed for students taking courses in international finance, international financial management, multinational finance and multinational financial management, International Financial Management offers a variety of real-life examples, both numerical and institutional, that demonstrate the use of financial analysis and reasoning in solving international financial problems.