国际财务管理英文版答案1Word下载.doc

国际财务管理英文版答案1Word下载.doc

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LectureOutline

ManagingtheMNC

FacingAgencyProblems

ManagementStructureofanMNC

WhyFirmsPursueInternationalBusiness

TheoryofComparativeAdvantage

ImperfectMarketsTheory

ProductCycleTheory

HowFirmsEngageinInternationalBusiness

InternationalTrade

Licensing

Franchising

JointVentures

AcquisitionsofExistingOperations

EstablishingNewForeignSubsidiaries

SummaryofMethods

ValuationModelforanMNC

DomesticModel

ValuingInternationalCashFlows

UncertaintySurroundinganMNC’sCashFlows

OrganizationoftheText

ChapterTheme

Thischapterintroducesthemultinationalcorporationashavingsimilargoalstothepurelydomesticcorporation,butawidervarietyofopportunities.Withadditionalopportunitiescomepotentialincreasedreturnsandotherformsofrisktoconsider.Thepotentialbenefitsandrisksareintroduced.

TopicstoStimulateClassDiscussion

1. WhatistheappropriatedefinitionofanMNC?

2. WhydoesanMNCexpandinternationally?

3. WhataretherisksofanMNCwhichexpandsinternationally?

4. WhydoyouthinkEuropeancountriesattractU.S.firms?

5. Whymustpurelydomesticfirmsbeconcernedabouttheinternationalenvironment?

POINT/COUNTER-POINT:

ShouldanMNCReduceItsEthicalStandardstoCompeteInternationally?

POINT:

Yes.WhenaU.S.-basedMNCcompetesinsomecountries,itmayencountersomebusinessnormstherethatarenotallowedintheU.S.Forexample,whencompetingforagovernmentcontract,firmsmightprovidepayoffstothegovernmentofficialswhowillmakethedecision.Yet,intheUnitedStates,afirmwillsometimestakeaclientonanexpensivegolfoutingorprovideskyboxticketstoevents.Thisisnodifferentthanapayoff.Ifthepayoffsarebiggerinsomeforeigncountries,theMNCcancompeteonlybymatchingthepayoffsprovidedbyitscompetitors.

COUNTER-POINT:

No.AU.S.-basedMNCshouldmaintainastandardcodeofethicsthatappliestoanycountry,evenifitisatadisadvantageinaforeigncountrythatallowsactivitiesthatmightbeviewedasunethical.Inthisway,theMNCestablishesmorecredibilityworldwide.

WHOISCORRECT?

UsetheInternettolearnmoreaboutthisissue.Whichargumentdoyousupport?

Offeryourownopiniononthisissue.

ANSWER:

Theissueisfrequentlydiscussed.ItiseasytosuggestthattheMNCshouldmaintainastandardcodeofethics,butinreality,thatmeansthatitwillnotbeabletocompeteinsomecases.Forexample,evenifitsubmitsthelowestbidonaspecificforeigngovernmentproject,itwillnotreceivethebidwithoutapayofftotheforeigngovernmentofficials.Theissueisespeciallyaconcernforlargeprojectsthatmaygeneratesubstantialcashflowsforthefirmthatischosentodotheproject.Ideally,theMNCcanclearlydemonstratetowhoeveroverseesthedecisionprocessthatitdeservestobeselected.Ifthereisjustonedecision-makerwithnooversight,anMNCcannotensurethatthedecisionwillbeethical.Butifthedecision-makermustbeaccountabletoadepartmentwhooverseesthedecision,theMNCmaybeabletopromptthedepartmenttoensurethattheprocessisethical.

AnswerstoEndofChapterQuestions

1.AgencyProblemsofMNCs.

a.ExplaintheagencyproblemofMNCs.

ANSWER:

Theagencyproblemreflectsaconflictofinterestsbetweendecision-makingmanagersandtheownersoftheMNC.Agencycostsoccurinanefforttoassurethatmanagersactinthebestinterestoftheowners.

b.WhymightagencycostsbelargerforanMNCthanforapurelydomesticfirm?

TheagencycostsarenormallylargerforMNCsthanpurelydomesticfirmsforthefollowingreasons.First,MNCsincurlargeragencycostsinmonitoringmanagersofdistantforeignsubsidiaries.Second,foreignsubsidiarymanagersraisedindifferentculturesmaynotfollowuniformgoals.Third,thesheersizeofthelargerMNCswouldalsocreatelargeagencyproblems.

2.ComparativeAdvantage.

a.Explainhowthetheoryofcomparativeadvantagerelatestotheneedforinternationalbusiness.

Thetheoryofcomparativeadvantageimpliesthatcountriesshouldspecializeinproduction,therebyrelyingonothercountriesforsomeproducts.Consequently,thereisaneedforinternationalbusiness.

b.ExplainhowtheproductcycletheoryrelatestothegrowthofanMNC.

Theproductcycletheorysuggeststhatatsomepointintime,thefirmwillattempttocapitalizeonitsperceivedadvantagesinmarketsotherthanwhereitwasinitiallyestablished.

3.ImperfectMarkets.

a.Explainhowtheexistenceofimperfectmarketshasledtotheestablishmentofsubsidiariesinforeignmarkets.

Because