国际财务管理 英文版答案1

1Chapter1MultinationalFinancialManagement:AnOverviewLectureOutlineManagingtheMNCFacingAgencyProblemsManagementStructureofanMNCWhyFirmsPursueInternationalBusinessTheoryofComparativeAdvantageImperfectMarketsTheoryProductCycleTheoryHowFirmsEngageinInternationalBusinessInternationalTradeLicensingFranchisingJointVenturesAcquisitionsofExistingOperationsEstablishingNewForeignSubsidiariesSummaryofMethodsValuationModelforanMNCDomesticModelValuingInternationalCashFlowsUncertaintySurroundinganMNC’sCashFlowsOrganizationoftheText2InternationalFinancialManagementChapterThemeThischapterintroducesthemultinationalcorporationashavingsimilargoalstothepurelydomesticcorporation,butawidervarietyofopportunities.Withadditionalopportunitiescomepotentialincreasedreturnsandotherformsofrisktoconsider.Thepotentialbenefitsandrisksareintroduced.TopicstoStimulateClassDiscussion1.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.Chapter1:MultinationalFinancialManagement:AnOverview3AnswerstoEndofChapterQuestions1.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:Becauseofimperfectmarkets,resourcescannotbeeasilyandfreelyretrievedbytheMNC.Consequently,theMNCmustsometimesgototheresourcesratherthanretrieveresources(suchasland,labor,etc.).b.Ifperfectmarketsexisted,wouldwages,prices,andinterestratesamongcountriesbemoresimilarorlesssimilarthanunderconditionsofimperfectmarkets?Why?ANSWER:Ifperfectmarketsexisted,resourceswouldbemoremobileandcouldthereforebetransferredtothosecountriesmorewillingtopayahighpriceforthem.Asthisoccurred,shortagesofresourcesinanyparticularcountrywouldbealleviatedandthecostsofsuchresourceswouldbesimilaracrosscountries.4InternationalFinancialManagement4.InternationalOpportunities.a.DoyouthinktheacquisitionofaforeignfirmorlicensingwillresultingreatergrowthforanMNC?Whichalternativeislikelytohavemorerisk?ANSWER:Anacquisitionwilltypicallyresultingreatergrowth,butitismoreriskybecauseitnormallyrequiresalargerinvestmentandthedecisioncannotbe