Sourcing Funds Globally

Sourcing Funds Globally - Sourcing Funds Globally...

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Unformatted text preview: Sourcing Funds Globally Multinational's Cost of Capital ka = ke (S/V) + kd (1 ) (B/V) Also have to consider: Political risk Exchange rate risk Higher agency costs Where to look for money globally 1. Bank related Bank loans Eurocredits Syndicated credits Euronotes 2. International Bond markets - Smaller markets - International bonds - Euro-bonds 3. Equity markets - Cross-list - Equity market (smaller) - Equity market (larger) e.g. LSE, NYSE, NASDAQ - Depository receipts 1. Euroequity issue in a global equity market. - issue equity underwritten and distributed in multiple foreign equity markets, sometimes simultaneously with distribution in domestic market. (used for privatization) Alternative equity sources Private placement under SEC Rule 144A - sale to a small set of qualified institutional investors. - SEC Reg. S modified to allow foreign issuers to use 144A. Private Equity Funds - usually limited partnerships of institutional and wealthy individual investors that raise capital in the most liquid capital markets, then invest in firms in emerging markets. (mature, family-owned firms in emerging markets) ...
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Sourcing Funds Globally - Sourcing Funds Globally...

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