【導(dǎo)讀】中國經(jīng)濟(jì)管理大學(xué)。學(xué)員授課用書電子輔導(dǎo)資料。《跨國公司財(cái)務(wù)管理》

　　

【正文】 ial institutions providing the NIF. ? Note Issuance Facilities versus Eurobonds ? Drawdown flexibility ? Timing flexibility ? Choice of maturities ? EuroMediumTerm Notes ? EuroCommercial Paper ? The Asiacurrency Market 55 PART III FINANCING THE MULTINATIONAL CORPORATION CHAPTER 8 THE COST OF CAPITAL FOR FOREIGN INVESTMENTS 56 Learning Objectives ● To determine the cost of capital for foreign investments and identify those circumstances under which that cost should be higher, lower, or the same as that for parable domestic projects ● To identify and address the key issues involved in applying the capital asset pricing model to estimate the cost of capital for foreign projects ● To illustrate the impact of globalization on the cost of capital ● To calculate the effective dollar costs of foreign currency borrowing taking into account interest rates, exchange rate changes, and taxes ● To identify the relevant factors and tradeoffs in establishing a pany’s worldwide capital structure ● To calculate the value of belowmarket financing opportunities 57 THE COST OF EQUITY CAPITAL ? The cost of equity capital for a firm is the minimum rate of return necessary to induce investors to buy or hold the firm’s stock. ? The Capital asset pricing model ? The CAPM is based on the notion that intelligent, riskaverse shareholders will seek to diversify their risks, and, as a consequence, the only risk that will be rewarded with a risk premium will be systematic risk. ? Weighted average cost of capital )( fmifi rrrr ??? ?)1()1(0 tLkkLk de ???? 58 DISCOUNT RATES FOR FOREIGN INVESTMENTS ? Key Issues in Estimating Foreign Project Discount Rates ? 1. Should the corporate proxies be . or local (., foreign) panies? ? 2. Is the relevant base portfolio against which the proxy betas are estimated the . market portfolio, the local portfolio, or the world market portfolio? ? 3. Should the market risk premium be based on the . market or the local market? ? 4. How, if at all, should country risk be incorporated in the cost of capital estimates? 59 DISCOUNT RATES FOR FOREIGN INVESTMENTS ? Three alternatives for estimating proxy betas are proposed here. ? Local Companies ? Proxy Industry ? Adjusted . Industry Beta ? In employing the CAPM, the base portfolio against which the proxy betas are estimated can be the home portfolio or the global market portfolio. ? The Impact of Globalization on the Cost of Capital ? Other things being equal, the use of a global CAPM means a lower cost of capital for this pany. ? Empirical Evidence ? The Relevant Market Risk Premium 60 ESTABLISHING A WORLDWIDE CAPITAL STRUCTURE ? The Cost of Debt Capital ? In general, the aftertax dollar cost of borrowing in the local currency for a foreign affiliate equals the aftertax interest expense plus the change in the exchange rate. ? The capital structure problem for the multinational enterprise is to determine the mix of debt and equity for the parent entity and for all consolidated and unconsolidated subsidiaries that maximizes shareholder wealth. ? Foreign Subsidiary Capital Structure ? Conform to the capital structure of the parent pany ? Reflect the capitalization norms in each foreign country ? Vary to take advantage of opportunities to minimize the MNC’s cost of capital 61 ESTABLISHING A WORLDWIDE CAPITAL STRUCTURE ? Political Risk Management ? Currency Risk Management ? Leverage and Foreign Tax Credit ? Leasing and Taxes ? CostMinimizing Approach to Global Capital Structure ? Valuing LowCost Financing Opportunities ? Taxes ? ZeroCoupon Bonds ? Debt versus Equity Financing ? Government Credit and Capital Control ? Government Subsidies and Incentives 62 PART IV FOREIGN INVESTMENT ANALYSIS CHAPTER 15 INTERNATIONAL PORTFOLIO INVESTMENT 63 Learning Objectives ● To describe the risks and advantages of international investing ● To explain how international investing can allow investors to achieve a better riskreturn tradeoff than by investing solely in . securities ● To identify the barriers to investing overseas ● To describe the various ways in which . investors can diversify into foreign securities ● To calculate the currency risk associated with investing in securities issued in different markets and denominated in various currencies ● To calculate the return associated with investing in securities issued in different markets and denominated in various currencies 64 THE RISKS AND BENEFITS OF INTERNATIONAL EQUITY INVESTING ? The risks of international investing ? 1. Changes in currency exchange rates ? 2. Dramatic changes in market value ? 3. Political, economic, and social events ? 4. Lack of liquidity ? 5. Less information ? 6. Reliance on foreign legal remedies ? 7. Different market operations ? This relation follows from the basic rule of portfolio diversification: The broader the diversification, the more stable the returns and the more diffuse the risks. 65 THE RISKS AND BENEFITS OF INTERNATIONAL EQUITY INVESTING ? Correlations and the Gains from Diversification ? Foreign market betas, which are a measure of market risk derived from the capital asset pricing model, are calculated relative to the . market in the same way that individual asset betas are calculated ? The obvious conclusion is that international diversification pushes out the efficient frontier—the set of portfolios that has the smallest possible standard deviation for its level of expected return and has the maximum expected return for a given level of risk—allowing investors simultaneously to reduce their risk and increase th