《贫铁矿经粗碎或中碎后的粗选磁选机.ppt》由会员分享，可在线阅读，更多相关《贫铁矿经粗碎或中碎后的粗选磁选机.ppt（31页珍藏版）》请在三一办公上搜索。
1、 McGraw Hill Companies,Inc.,20008/26/2023,Financial Management in the International BusinessChapter 20,McGraw Hill Companies,Inc.,20008/26/2023,Introduction,Scope of financial management includes three sets of related decisions:Investment decisions,decisions about what activities to finance.Financin
2、g decisions,decisions about how to finance those activities.Money management decisions,decisions about how to manage the firms financial resources most efficiently.,20-1,McGraw Hill Companies,Inc.,20008/26/2023,Investment Decisions,Capital budgeting:quantifies the benefits,costs and risks of an inve
3、stment.Managers can reasonably compare different investment alternatives within and across countries.Complicated process:Must distinguish between cash flows to project and those to parent.Political and economic risk can change the value of a foreign investment.Connection between cash flows to parent
4、 and the source of financing must be recognized.,20-2,McGraw Hill Companies,Inc.,20008/26/2023,Project and Parent Cash Flows,Project cash flows may not reach the parent:Host-country may block cash-flow repatriation.Cash flows may be taxed at an unfavorable rate.Host government may require a percenta
5、ge of cash flows to be reinvested in the host country.,20-3,McGraw Hill Companies,Inc.,20008/26/2023,Adjusting for Political and Economic Risk,Political risk:Expropriation-Iranian revolution,1979.Social unrest-after the breakup of Yugoslavia,company assets were rendered worthless.Political change-ma
6、y lead to tax and ownership changes.,20-4,McGraw Hill Companies,Inc.,20008/26/2023,Euromoney Magazines Country Risk Ratings,Adapted from Table 20.1 in text,Highest and lowest ranked countries.,Total score=100,20-5,McGraw Hill Companies,Inc.,20008/26/2023,Financing Decisions(a),Source of financing:Gl
7、obal capital markets for lower cost financing.Host-country may require projects to be locally financed through debt or equity.Limited liquidity raises the cost of capital.Host-government may offer low interest or subsidized loans to attract investment.Impact of local currency(appreciation/depreciati
8、on)influences capital and financing decisions.,20-6,McGraw Hill Companies,Inc.,20008/26/2023,Financing Decisions(b),Financial structure:Debt/equity ratios vary with countries.Tax regimes.Follow local capital structure norms?More easily evaluate return on equity relative to local competition.Good for
9、 companys image.Best recommendation:adopt a financial structure that minimizes its cost of capital.,20-7,McGraw Hill Companies,Inc.,20008/26/2023,Debt Ratios for Selected Industrial Countries,Highest and lowest ranked countries.,Debt ratio=total debt/total assets at book value.,Country Mean,Adapted
10、from Table 20.2 in text,20-8,McGraw Hill Companies,Inc.,20008/26/2023,Global Money Management(The Efficiency Objective),Minimizing cash balances:Money market accounts-low interest-high liquidity.Certificates of deposit-higher interest-lower liquidity.Reducing transaction costs(cost of exchange):Tran
11、saction costs:changing from one currency to another.Transfer fee:fee for moving cash from one location to another.,20-9,McGraw Hill Companies,Inc.,20008/26/2023,Global Money Management(The Tax Objective),Countries tax income earned outside their boundaries by entities based in their country.Can lead
12、 to double taxation.Tax credit allows entity to reduce home taxes by amount paid to foreign government.Tax treaty is an agreement between countries specifying what items will be taxed by authorities in country where income is earned.Deferral principle specifies that parent companies will not be taxe
13、d on foreign income until the dividend is received.Tax haven is used to minimize tax liability.,20-10,McGraw Hill Companies,Inc.,20008/26/2023,OECD Corporate Income Tax Rates,Top Tax Rate%,Highest and lowest ranked countries and USA.,Adapted from Table 20.3 in text,20-11,McGraw Hill Companies,Inc.,2
14、0008/26/2023,Moving Money Across Borders:Attaining Efficiencies and Reducing Taxes,Unbundling:a mix of techniques to transfer liquid funds from a foreign subsidiary to the parent company without piquing the host-country.Dividend remittances.Royalty payments and fees.Transfer Prices.Fronting loans.,2
15、0-12,McGraw Hill Companies,Inc.,20008/26/2023,Dividend Remittances,Most common method of transfer.Dividend varies with:tax regulations.Foreign exchange risk.Age of subsidiary.Extent of local equity participation.,Dividends,20-13,McGraw Hill Companies,Inc.,20008/26/2023,Royalty Payments and Fees,Roya
16、lties represent the remuneration paid to owners of technology,patents or trade names for their use by the firm.Common for parent to charge a subsidiary for technology,patents or trade names transferred to it.May be levied as a fixed amount per unit sold or percentage of revenue earned.Fees are compe
17、nsation for professional services or expertise supplied to subsidiary.Management fees or technical assistance fees.Fixed charges for services provided,20-14,McGraw Hill Companies,Inc.,20008/26/2023,Transfer Prices,Price at which goods or services are transferred within a firms entities.Position fund
18、s within a company.Move founds out of country by setting high transfer fees or into a country by setting low transfer fees.Movement can be within subsidiaries or between the parent and its subsidiaries.,20-15,McGraw Hill Companies,Inc.,20008/26/2023,Benefits of Transfer Fees,Reduce tax liabilities b
19、y using transfer fees to shift from a high-tax country to a low-tax country.Reduce foreign exchange risk exposure to expected currency devaluation by transferring funds.Can be used where dividends are restricted or blocked by host-government policy.Reduce import duties(ad valorem)by reducing transfe
20、r prices and the value of the goods.,20-16,McGraw Hill Companies,Inc.,20008/26/2023,Problems with Transfer Pricing,Few governments like it.Believe(rightly)that they are losing revenue.Has an impact on management incentives and performance evaluations.Inconsistent with a profit center.Managers can hi
21、de inefficiencies.,20-17,McGraw Hill Companies,Inc.,20008/26/2023,Fronting Loans,A loan between a parent and subsidiary is channeled through a financial intermediary(bank).Can circumvent host-country restrictions on remittance of funds from subsidiary to parent.Provides certain tax advantages.,20-18
22、,McGraw Hill Companies,Inc.,20008/26/2023,An Example of the Tax Aspects of a Fronting Loan,Tax Haven Subsidiary,London Bank,Foreign Operating Subsidiary,Pays 8%Interest(Tax Free),Pays 9%Interest(Tax Deductible),Deposit$1 Million,Loan$1 Million,Figure 20.1,20-19,McGraw Hill Companies,Inc.,20008/26/20
23、23,Techniques for Global Money Management Centralized Depositories,Need cash reserves to service accounts and insuring against negative cash flows.Should each subsidiary hold its own cash balance?By pooling,firm can deposit larger cash amounts and earn higher interest rates.If located in a major fin
24、ancial center can get information on good investment opportunities.Can reduce the total size of cash pool and invest larger reserves in higher paying,long term,instruments.,20-20,McGraw Hill Companies,Inc.,20008/26/2023,Centralized Depositories,Day-to-Day Cash Needs(A),One Standard Deviation(B),Requ
25、ired Cash Balance(A+3xB),Spain$10$1$13,Italy$6$2$12,Germany$12$3$21,Total$28$6$46,20-21,McGraw Hill Companies,Inc.,20008/26/2023,Techniques for Global Money Management Multilateral Netting,Ability to reduce transaction costs.Bilateral netting.Multilateral netting-simply extending the bilateral conce
26、pt to multiple subsidiaries within an international business.,20-22,McGraw Hill Companies,Inc.,20008/26/2023,Cash Flows before Multilateral Netting,German Subsidiary,French Subsidiary,ItalianSubsidiary,SpanishSubsidiary,$4 Million,$1 Million,$3 Million,$2 Million,$5 Million,$3 Million,$4 Million,$5
27、Million,$2 Million,$5 Million,$6 Million,$3 Million,Figure 20.2a,20-23,McGraw Hill Companies,Inc.,20008/26/2023,Calculation of Net Receipts($Million),Paying Subsidiary,Receiving Subsidiary,Germany France Spain Italy,Total Receipts,Net Receipts*(payments),Germany-$3$4$5$12($3),France$4-2 3 9(2),Spain
28、 5 3-1 9 1,Italy 6 5 2-13 4,Total payments$15$11$8$9,Net receipts=Total payments-total receipts,Figure 20.2b,20-24,McGraw Hill Companies,Inc.,20008/26/2023,Cash Flows after Multilateral Netting,German Subsidiary,French Subsidiary,SpanishSubsidiary,ItalianSubsidiary,Pays$1 Million,Pays$3 Million,Pays
29、$1 Million,Figure 20.2c,20-25,McGraw Hill Companies,Inc.,20008/26/2023,Managing Foreign Exchange Risk,Risk that future changes in a countrys exchange rate will hurt the firm.Transaction exposure:extent income from transactions is affected by currency fluctuations.Translation exposure:impact of curre
30、ncy exchange rates on consolidated results and balance sheet.Economic exposure:effect of changing exchange rates over future prices,sales and costs.,20-26,McGraw Hill Companies,Inc.,20008/26/2023,Strategies for Reducing Foreign Exchange Risk(a),Primarily protect short-term cash flows.Reducing transa
31、ction and translation exposure:Buying forward and currency swaps.Lead strategy:collecting receivables early when currency devaluation is anticipated and paying early when currency may appreciate.Lag strategy:delaying receivable collection when anticipating currency appreciation and delaying payables
32、 when currency depreciation is expected.,20-27,McGraw Hill Companies,Inc.,20008/26/2023,Strategies for Reducing Foreign Exchange Risk(b),Reducing economic exposure:Key is to distribute productive assets to various locations so firm is not severely affected by exchange rate changes.,Manufacturing Fac
33、ility Dispersal,20-28,McGraw Hill Companies,Inc.,20008/26/2023,Managing Foreign Exchange Exposure,No agreement as to how,but commonality of approach does exist:Central control of exposure.Distinguish between transaction/translation exposure and economic exposure.Forecast future exchange rate movements.Good reporting systems to monitor firms exposure to exchange rate changes.Produce monthly foreign exchange exposure reports.,20-29,McGraw Hill Companies,Inc.,20008/26/2023,
