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Multinational Finance Function

Firms that invest and operate abroad access both debt and equity capital in large global markets as well as in local markets. We highlight the external sources of funds available to multinationals, as well as the internal sources that come from inter-firm linkages.

We first explore global debt markets, global equity markets, and offshore financial centers. Then, the types of foreign exchange risk and the hedging strategies associated with foreign-exchange risk management are examined. We conclude with international capital budgeting decisions, import and export financing, and tax issues facing multinationals.

Services

Objective
To describe the multinational finance function and how it fits in the MNE’s organizational structure.

Outcomes
Decide the proper mix of debt and equity to fund continued growth into new markets.

Tools and Techniques
~ Debt Market
~ Equity Market

Objective
To show how companies can acquire outside funds for normal operations and expansion, including offshore debt and equity funds.

Outcomes
Use local and international debt markets to raise funds.

Tools and Techniques
~ Leverage and Debt Financing
~ Equity Financing
~ International Bonds

Objective
To protect against the major financial risks such as inflation and exchange-rate movements, of investing abroad.

Outcomes
Define and measure exposure, set up a good monitoring and reporting system, adopt a policy to assign responsibility for exposure management and formulate strategies for hedging.

Tools and Techniques
~ Exposure
~ Hedging
~ Derivatives

Objective
To highlight some of the tax issues facing MNEs.

Outcomes
Become familiar with both home country’s tax policy on foreign operations and the tax laws of each country in which the international company operates.

Tools and Techniques
~ Domestic and International Tax Practices
~ Tax Treaties

Engagements

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