International Finance Paper

International Finance Paper - International Finance...

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International Finance 1 International Finance Paper University Of Phoenix Finance 419 September 1, 2008 International Finance Paper
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International Finance 2 Organizations that expand to an international presence can result in the business benefiting. Global businesses can expand one’s presence, add revenues and profit, and reduce the dependence on the local market. A global organization is “an international alliance involving many different courtiers” (Thefreedictionary.com, 2008). In 1990, Wal-Mart became United States number one retailer located in over 30 states. “Branching out further in 1991, Wal-Mart stepped into the international market with the opening of a retail unit in Mexico City (Walmartstores.com, 2008). When Wal-Mart made the decision to make an international presence, the global investment banking process, regulatory bodies, and contemporary issues in international financial management that have affected the organization. Global Investment Banking Process For a large multinational company like Wal-Mart the availability of global financing for it’s operations is vital. Without the ability to procure financing on a global scale there is no way for Wal-Mart to fund it’s operations except from it’s own profits. “Because of their access to the international bond and equity markets, MNCs may have lower long-term financing costs, which result in differences between the capital structures of MNCs and those of purely domestic companies.” (Gitman, 2005). Global financial markets allow firms to borrow funds through the issuance of bonds and also attract equity investors from around the world. This can also mean the firm can get better prices for their securities because there is a larger market to work with. Many U.S.-based MNCs, for example, have created subsidiaries in the United States and Western Europe, especially in Luxembourg. Such subsidiaries can be used to raise large amounts of funds in “one move,” the funds being redistributed wherever MNCs need them.”
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International Finance 3 (Gitman, 2005). Without the availability of these funds a large multinational corporation
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This note was uploaded on 08/17/2011 for the course BUS 200 taught by Professor Torres during the Spring '11 term at University of Phoenix.

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International Finance Paper - International Finance...

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