Define political risk into the capital budgeting process, Financial Management

Assignment Help:

How would you incorporate political risk into the capital budgeting process of foreign investment projects?

One method is to adjust the cost of capital upward to imitate political risk and discount the supposed future cash flows at a higher rate. On the other hand, one can subtract insurance premium for political risk from the expected future cash flows and make use of the usual cost of capital that is applied to domestic capital budgeting.

Related Discussions:- Define political risk into the capital budgeting process

Protected put, Protected Put A protected put would involve a long put a...

Protected Put A protected put would involve a long put and a long stock. For example - ONGC. Underlying stock = Rs. 809 Buy Mar Rs. 900 Put @ Rs.68.8 Total cos

Write a market outlook for bond markets, The requirement of this assignment...

The requirement of this assignment that you write a Market Outlook for Bond Markets in a report form, in which you present your assessment of the investment potential of global so

Explain financial ratio, What is a financial ratio? A financial ratio i...

What is a financial ratio? A financial ratio is a number that denotes the value of one financial variable that is relative to another. Put much more simply, a financial ratio

Types of financial incentive schemes, Types of financial incentive schemes ...

Types of financial incentive schemes Performance associated pay (PRP) systems e.g. piecework or sales commission Bonuses e.g. supplementary payments for targets or ai

Sources of finance., Classification of source of finances

Classification of source of finances

Routine functions, Routine functions For the efficient execution of the...

Routine functions For the efficient execution of the managerial finance functions, routine functions have to be executed. Such decisions concern procedures and systems and incl

Explain the disadvantages of ifrs 8, Disadvantages of IFRS 8 Recon...

Disadvantages of IFRS 8 Reconciliations may be time consuming. Less comparable with other organisations, as every entity has a different way of running their business.

hazard or risk , For this assessment, you are required to choose one workp...

For this assessment, you are required to choose one workplace hazard or risk to safety in the financial services industry that interests you. Prepare a report on the area you have

Importance of a sinking fund, "The emphasis on the practice of good corpora...

"The emphasis on the practice of good corporate governance has brought about more negative than positive implications to public-listed companies". Do you agree with the above st

Calculate the exchange exposure faced by the u.s. company, A U.S. company h...

A U.S. company holds an asset in France and faces the subsequent scenario: State 1 State 2 State 3 State 4

Write Your Message!

Name

Email id

Message

Verfication Code

User Account

All Pages