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the current spot exchange rate is dr240100 long-run inflation in greece is calculated at 8 percent yearly and 45 in the united states if ppp is
define the concept of a real option discuss some real options a firm can be confronted with when investing in real projectsa positive apv project is
explain the difference between performing the capital budgeting analysis from the parent firmrsquos perspective as opposed to the project
define in the modigliani-miller equation mm equation why is the market value of the levered firm greater as compared to the market value of an
what is the intuition of discounting the several cash flows in the apv model at fixed discount ratesthe apv model is a value-additivity method where
what is the nature of a concessionary loan and how is it handled in the apv modela concessionary loan is a loan that is provided by a governmental
what problems can take place into the capital budgeting analysis if project debt is evaluated in place of the borrowing capacity created by the
relate the concept of lost sales to the definition of incremental cash flowwhile a new capital project is take on it may compete with an existing
what creates the apv capital budgeting framework useful for analyzing foreign capital expendituresthe apv framework is a value - additivity method
what makes the apv capital budgeting framework helpful for analyzing foreign capital expendituresthe apv framework is a value- additivity method as
explain what is meant by the incremental cash flows of a capital projectincremental cash flows are defined by the change in total firm cash inflows
what is the intuition behind the npv capital budgeting frameworkthe npv framework is a discounted cash flow method the method compares the present
why is capital budgeting analysis so important to the firmthe major goal of the financial manager is to maximize shareholder wealth capital
under what circumstances will the foreign subsidiaryrsquos financial structure become relevantthe subsidiaryrsquos own financial structure will
explain how the premium and discount are determined while assets are ptm priced-to-market when would the law of one price prevail in international
explain the pricing-to-market phenomenonanswer the pricing-to-market abbreviated as ptm refers to the phenomenon that similar securities are priced
explain foreign equity ownership restrictions why do you think countries entail these restrictionsseveral countries restrict the maximum fractional
assume there exists a nontradable asset with a perfect positive correlation along with a portfolio t of tradable assets how will the nontradable
define and discuss indirect world systematic riskthe indirect world systematic risk can be illustrated as the covariance among a nontradable asset
explain the pricing spill-over effectsuppose a firm operating in a segmented capital market such as china for example decides to cross-list its stock
what factors would you consider in evaluating the political risk related with making fdi in a foreign countryanswer factors to be considered as
discuss the different ways political events in a host country may affect local operations of an mncanswer the answer can be organized based on
what are the disadvantages and advantages of foreign direct investment fdi like opposed to a licensing agreement with a foreign partneranswer the
define country risk how is it different from political riskcountry risk is a broader quantify of risk as compared to the political risk as the former
what can be the reason for the negative synergistic gains for british acquisitions of us firmsnegative synergies for british acquisitions of us firms