International monetary system, which defines the overall financial environment in which
multinational corporations and international investors operate.
The international monetary system can be defined as the institutional framework within which
Some important Q&A For chapter 3
1. Define the balance of payments.
The balance of payments (BOP) can be defined as the statistical record of a countrys
international transactions over a certain period of time presented in the form of double-entry
Some important Q&A For chapter 4
1. The majority of major corporations are franchised as public corporations. Discuss the
key strength and weakness of the public corporation. When do you think the public
corporation as an organizational form is unsuitable
Notes for chapter 4
Corporate governance can be defined as the economic, legal, and institutional framework in
which corporate control and cash flow rights are distributed among shareholders, managers,
and other stakeholders of the company.
The public cor
Short Definitions for chapter 5
The spot market involves almost the immediate purchase or sale of foreign exchange. Typically,
cash settlement is made two business days (excluding holidays of either the buyer or the seller)
after the transaction for trade
International Financial Management is written from the perspective that the fundamental goal
of sound financial management is shareholder wealth maximization.
Shareholder wealth maximization means that the firm makes all business decisions and
Some important Q&A For chapter 1
1. Why is it important to study international financial management?
We are now living in a world where all the major economic functions, i.e. consumption,
production, and investment, are highly globalized. It is thus essen
Some important Q&A For chapter 5
1. Give a full definition of the market for foreign exchange.
Broadly defined, the foreign exchange (FX) market encompasses the conversion of purchasing
power from one currency into another, bank deposits of foreign curren
Charles Kimbrell 1
1.) The T- bond return is independent of the state of the economy because government securities
are considered to be free of default risk. Without risk of default, the state of the economy will not
affect the expected return of a
1.) EPS growth rate is 1.17%, .60%, and 5.58%.
Market/book ratio is 1.5, 1.15, .90, and .77.
PE ratio is 12.5, 12.83, 14.65, and 13.3.
As is the case for Georgia Atlantic, operating in a mature market, there are only a few growth
Case 28 Evan Chacon
A. Boudoirs Inc- Preferred Stock (nonconvertible), bank-term loan. I chose this
because the real estate and the inventory are under mortgage no further long-term
debt is recommended and to secure the bank credit line inventory is under
Delta State University
Answers in red.
1 a. I= 10, N= 1, PV= (10000), PMT= 0, FV= 11,000.
b. If it pays 5% - I= 5, other amounts remain the same. FV will be $10,500.
If it pays 15 % - I=5, other amounts remain the same. FV wil
1.) a.) It is because TECO sells bonds at par and sets the coupon rates at the market rate of
interest when the bonds are issued, interest rates have risen over the last 25 years, and that
explains the rising pattern of coupon rate
A. Boudoirs Inc: Leasing arrangement: The company can negotiate for a lease to own
arrangement for the new building with a builder or contractor.
B. Timberland Power & Lights: Long-term bonds: Reasonable norm for long-term debt wi
1.) A.) The capital structure is how a firm finances its overall operations and growth by using
different sources of funds. Debt comes in the form of bond issues or long-term notes payable,
while equity is classified as common stock, preferred stoc
2.) NPV= 36,955.10. NPV is most consistent with the goal of owner wealth maximization. A
projects NPV is the dollar amount of change in the value of the firm as a result of undertaking
the project. A project is deemed acceptable i
Some important Q&A For chapter 2
1. Explain Greshams Law.
Greshams law refers to the phenomenon that bad (abundant) money drives good (scarce) money
out of circulation. This kind of phenomenon was often observed under the bimetallic standard
under which b