ch20 - Multinational Financial Management Alan Shapiro 9th...

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Multinational Financial Management Alan Shapiro 9 th Edition Power Points by Joseph F. Greco, Ph.D. California State University, Fullerton
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CHAPTER 20 Managing the Multinational Financial System
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MANAGING THE MULTINATIONAL FINANCIAL SYSTEM I. THE VALUE OF THE MULTINATIONAL FINANCIAL SYSTEM Its value lies in its ability to arbitrage in the following areas: 1. Tax systems 2. Financial markets 3. Regulatory systems
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TAX ARBITRAGE Tax Arbitrage is possible because we know: 1. Wide variations exist in global tax systems examples: Germany vs. Honk Kong 2. Firms want to reduce taxes paid especially the “triple-taxed” MNC move funds to low-tax jurisdiction
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TAX ARBITRAGE 3. Tax Factors (triple taxation): a. Triple Taxes may be levied on 1.) corporate income 2.) personal income (includes dividends) 3.) subsidiary income b. U.S. Tax System Provision Offset: Foreign tax credit given on tax already paid abroad.
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FINANCIAL MARKET ARBITRAGE Financial Market Arbitrage is possible if we 1. assume imperfect markets exist because a. Formal barriers to trade exist b. Informal barriers also exist
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This note was uploaded on 01/24/2011 for the course FINS 5516 taught by Professor A during the Three '10 term at University of New South Wales.

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ch20 - Multinational Financial Management Alan Shapiro 9th...

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