L_International

L_International - International Corporate Finance Click to...

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Click to edit Master subtitle style International Corporate Finance
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n Outline n Exchange Rates n International Capital Budgeting n Exchange Rate Risk n Political Risk
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n Domestic vs. International Financial Management u Need to consider the effect of exchange rates when operating in more than one currency u Must consider the political risk associated with actions of foreign governments u More financing opportunities when you consider the international capital markets, which may reduce the firm’s cost of capital
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n Exchange Rates n The price of one country’s currency in terms of another n Most currency is quoted in terms of dollars u Euro 1.2695 .7877 u The first number (1.2695) is how many U.S. dollars it takes to buy 1 Euro u The second number (.7877) is how many Euros it takes to buy $1
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n Example: Exchange Rates n Suppose you have $10,000. How many Japanese Yen can you buy? u Exchange rate = 108.21 Yen per dollar u Buy 10,000(108.21) = 1,082,100 Yen n Suppose you are visiting Mumbai and you want to
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This note was uploaded on 06/22/2011 for the course FINA 365 taught by Professor Koch during the Spring '08 term at South Carolina.

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L_International - International Corporate Finance Click to...

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