What role do foreign stock markets contribute to an mnc

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Reference no: EM132181935

Questions -

1. What are two international opportunities for a Multinational Corporation (MNC) along with the benefits and concerns if you are a US corporation looking to expand overseas?

2. What goes into the Valuation of an MNC? List and briefly discuss at least two items.

3. What are two exchange rate effects on Investing and Borrowing internationally and why? Briefly discuss.

4. What role do Foreign Stock Markets contribute to an MNC and why? Give one example and discuss.

5. Your company expects to receive 5,000,000 Japanese yen 60 days from now. You decide to hedge your position by selling Japanese yen forward. The current spot rate of the yen is $.0089, while the forward rate is $.0095. You expect the spot rate in 60 days to be $.0090. How many dollars will you receive for the 5,000,000 yen 60 days from now if you sell yen forward? Briefly discuss.

6. ABC Co. is large U.S.-Based MNC with large subsidiaries in Germany. It has issued stock in Germany in order to establish its business. It could have issued stock in the U.S. and then used the proceeds in order to support the growth in Europe. What is a possible advantage of issuing the stock in Germany to finance German operations? Also, why might the German investors prefer to purchase the stock that was issued in Germany rather than purchase the stock of ABC on a U.S. stock exchange?

7. Bank Z can borrow either $20 million or €20 million. The current spot rate of the euro is $1.13. Furthermore, Bank Z expects the spot rate of the euro to be $1.10 in 90 days. What is Bank's Z dollar profit from speculating if the spot rate of the euro is indeed $1.10 in 90 days?

Reference no: EM132181935

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