公司金融课件chap022.ppt

22 International Corporate Finance Key Concepts and Skills Understand how exchange rates are quoted and what they mean Know the difference between spot and forward rates Understand purchasing power parity and interest rate parity and the implications for changes in exchange rates Understand the basics of international capital budgeting Understand the impact of political risk on international business investing Chapter Outline Terminology Foreign Exchange Markets and Exchange Rates Purchasing Power Parity Interest Rate Parity, Unbiased Forward Rates, and the International Fisher Effect International Capital Budgeting Exchange Rate Risk Political Risk Domestic Financial Management and International Financial Management Considerations in International Financial Management Have to consider the effect of exchange rates when operating in more than one currency Have to consider the political risk associated with actions of foreign governments More financing opportunities when you consider the international capital markets, which may reduce the firm’s cost of capital International Finance Terminology American Depositary Receipt (ADR) Cross-rate Eurobond Eurocurrency (Eurodollars) Foreign bonds Gilts London Interbank Offer Rate (LIBOR) Swaps Global Capital Markets The number of exchanges in foreign countries continues to increase, as does the liquidity on those exchanges Exchanges that allow for the flow of capital are extremely important to developing countries The United States has one of the most developed capital markets in the world, but foreign markets are becoming more competitive and are often willing to try more innovative ways to do business Exchange Rates The price of one country’s currency in terms of another Most currency is quoted in terms of dollars Consider the following quote: Euro 1.2695 .7877 The first number (1.2695) is how many U.S. dollars it takes to buy 1 Euro The second number (.7877) is how many Euros it takes to buy $1 The two numbers are reciproc