国际财务管理英文版答案1.doc
《国际财务管理英文版答案1.doc》由会员分享,可在线阅读,更多相关《国际财务管理英文版答案1.doc(15页珍藏版)》请在冰豆网上搜索。
Chapter1:
MultinationalFinancialManagement:
AnOverview 15
Chapter1
MultinationalFinancialManagement:
AnOverview
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?
ANSWER:
TheagencycostsarenormallylargerforMNCsthanpurelydomesticfirmsforthefollowingreasons.First,MNCsincurlargeragencycostsinmonitoringmanagersofdistantforeignsubsidiaries.Second,foreignsubsidiarymanagersraisedindifferentculturesmaynotfollowuniformgoals.Third,thesheersizeofthelargerMNCswouldalsocreatelargeagencyproblems.
2.ComparativeAdvantage.
a.Explainhowthetheoryofcomparativeadvantagerelatestotheneedforinternationalbusiness.
ANSWER:
Thetheoryofcomparativeadvantageimpliesthatcountriesshouldspecializeinproduction,therebyrelyingonothercountriesforsomeproducts.Consequently,thereisaneedforinternationalbusiness.
b.ExplainhowtheproductcycletheoryrelatestothegrowthofanMNC.
ANSWER:
Theproductcycletheorysuggeststhatatsomepointintime,thefirmwillattempttocapitalizeonitsperceivedadvantagesinmarketsotherthanwhereitwasinitiallyestablished.
3.ImperfectMarkets.
a.Explainhowtheexistenceofimperfectmarketshasledtotheestablishmentofsubsidiariesinforeignmarkets.
ANSWER:
Because