公司理財(cái)chap020(參考版)
2025-01-04 22:00本頁(yè)面
【正文】 b) ? 0 Capital Controls Governments sometimes restrict import and export of money through taxes or outright bans.,Reasons for Deviations from IRP,Combining PPP and UIP we can get the International Fisher Effect: RUS – hUS = RFC – hFC The International Fisher Effect tells us that the real rate of return must be constant across countries. If it is not, investors will move their money to the country with the higher real rate of return.,International Fisher Effect,Home Currency Approach Estimate cash flows in foreign currency Estimate future exchange rates using UIP Convert future cash flows to dollars Discount using domestic required return Foreign Currency Approach Estimate cash flows in foreign currency Use the IFE to convert domestic required return to foreign required return Discount using foreign required return Convert NPV to dollars using current spot rate,20.5 International Capital Budgeting,Your company is looking at a new project in Mexico. The project will cost 9 million pesos. The cash flows are expected to be 2.25 million pesos per year for 5 years. The current spot exchange rate is 9.08 pesos per dollar. The riskfree rate in the US is 4%, and the riskfree rate in Mexico 8%. The dollar required return is 15%. Should the company make the investment?,Home Currency Approach,Use the same information as the previous example to estimate the NPV using the Foreign Currency Approach Mexican inflation rate from the International Fisher Effect is 8% 4% = 4% Required Return = 15% + 4% = 19% PV of future cash flows = 6,879,679 NPV = 6,879,679 – 9,000,000 = 2,120,321 pesos NPV = 2,120,321 / 9.08 = 233,516,Foreign Currency Approach,ShortRun Exposure LongRun Exposure Translation Exposure,20.6 Exchange Rate Risk,Risk from daytoday fluctuations in exchange rates and the fact that companies have contracts to buy and sell goods in the short run at fixed prices Managing risk Enter into a forward agreement to guarantee the exchange rate. Use foreign currency options to lock in exchange rates if they move against you, but benefit from rates if they move in your favor.,ShortRun Exposure,Longrun fluctuations come from unanticipated changes in relative economic conditions Could be due to changes in labor markets or governments More difficult to hedge Try to match longrun inflows and outflows in the currency Borrowing in the foreign country may mitigate some of the problems,LongRun Exposure,Income from foreign operations must be
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