000			07855nam a2200157Ia 4500
020			_a0333930690
082			_a658.1599 _bJAI
100			_aJain, P. K. & Others
245			_aInternational financial management
260			_aNew Delhi _bMacmillan India Ltd. _c2008
300			_axii,334p.
500			_aCONTENTS Preface PARTI BACKGROUND 1. GENERAL INTRODUCTION 3 PART II INTERNATIONAL MONETARY AND FINANCIAL ENVIRONMENT 2. BALANCE OF PAYMENTS 7 2.1 Introduction 7 2.2Presentation of Balance of Payments 8 2.3Importance of BOP 11 2.4Limitations of BOP Statement 12 2.5 Adjustment of Demand and Supply of Foreign Currency 12 2.6The Link Between the National Economy and International Activities 13 2.7Balance of Indebtedness 15 2.8 Conclusion 15 Questions and Exercises 15 3. INTERNATIONAL MONETARY SYSTEM 18 3.1 Introduction 18 3.2 Evolution of International Monetary System 18 3.3 The System of Bretton Woods (1944-71) 19 3.4International Monetary Fund 19 3.5 International Bank for Reconstruction and Development (The World Bank) 22 3.6The International Monetary System Since 1971 23 . 3.7 Different Exchange Rate Regimes 24 3.8Conclusion 27 Questions and Exercises 21 4. EUROPEAN MONETARY SYSTEM 28 4.1 Introduction 28 4.2 Objectives of the European Monetary System 28 4.3 Characteristics of the EMS 29 4.4 The Mechanisms of the EMS 30 4.5 Evolution of the EMS 32 4.6 European Bank of Investment (EBI) 34 4.7 European Monetary Union (EMU) 36 4.8 Conclusion 39 Questions and Exercises 40 5. FOREIGN EXCHANGE MARKET 41 5.1 Introduction 41 5.2 Participants in the FE Market 41 5.3 Quoting in the FE Market 42 5.4 Settlements 45 5.5 Adjustment of Demand and Supply on the Spot Market: Process of Arbitrage 46 5.6 Forward Rate 47 5.7 Speculation in the Forward Market 51 5.8 Conclusion 51 Solved Problems 52 Questions and Exercises 56 6. EXCHANGE RATE THEORIES 58 6.1 Introduction 58 6.2 Theory of Purchasing Power Parity (PPP) 58 6.3 Theory of Interest Rate Parity 61 6.4 Relation Between Nominal Interest Rates, Rates of Inflation and Future Spot Exchange Rates 63 6.5 Balance of Payments (BOP) and Exchange Rate 63 6.6 Methods of Forecasting Exchange Rates 64 6.7 Conclusion 66 Solved Problems 67 Questions and Exercises 69 PARTIIl RISKS IN INTERNATIONAL OPERATIONS 7. EXCHANGE RATE RISK ASSESSMENT AND INTERNAL TECHNIQUES OF HEDGING 73 7.1 Introduction 73 7.2 Exchange Rate Risk of an Enterprise 73 7.3 Evaluation of Exchange Rate Exposure 75 7.4 Internal Techniques of Hedging 79 7.5 Other Internal Techniques for Covering Risk 84 7.6 Basic Strategy for Hedging Transactions Exposure 85 7.7 Conclusion 85 Questions and Exercises 86 8. EXTERNAL TECHNIQUES FOR COVERING EXCHANGE RATE RISK 87 8.1 Introduction 78 8.2 Covering Risk in the Forward Market 87 8.3Covering in the Money Market 89 8.4 Foreign Currency Advances 92 8.5 Covering in Foreign Exchange Futures (or Financial Forward) Contract Market 92 8.6 Covering in the Foreign Exchange Options Market 95 8.7 Currency Swaps 100 8.8 Conclusion 101 Solved Problems 101 Questions and Exercises 108 9. INTEREST RATE RISK 110 9.1 Introduction 110 9.2 Importance of Interest Rate Risk 110 9.3 Measurement of Interest Rate Risk 112 9.4 Interest Rate Risk Management 116 9.5Interest Rate Futures 117 9.6Covering of Risk in the Market of Interest Rate Futures 119 9.7 Covering Interest Rate Risk in Options Market 124 9.8Instruments on the Over-the-Counter (OTG) Market 125 9.9 Conclusion 130 Solved Problems130 Questions and Exercises 135 10. POLITICAL RISK 138 10.1 Introduction 138 10.2 Types of Political Risk 138 10.3 Evaluation of Political Risk 140 10.4 Political Risk Management 145 10.5 Conclusion 148 Questions and Exercises149 PART IV INTERNATIONAL INVESTMENTS AND FOREIGN OPERATIONS 11. FOREIGN INVESTMENT: THEORIES AND OPERATIONS 153 11.1 Introduction 153 11.2 Foreign Investment Theories 154 11.3 Theories based on the Organization of Firms 156 11.4 Electic Theory of International Production 158 11.5 Exports 159 11.6 International Licence Agreements 160 11.7 International Franchise Agreements 161 11.8 International Management Contracts 162 11.9 Turnkey Projects 162 11.10 Specific Contracts 163 11.11 Direct Investment 163 11.12 Activities of Venture Capital 165 11.13 Conclusion 166 Questions and Exercises166 12. FOREIGN CAPITAL BUDGETING DECISIONS 12.1Introduction 168 12.2 Relevant Data 169 12.3 Evaluation of a Project 170 12.4 Cash Flow Determination 173 12.5 Conclusion 181 Solved Problems182 Questions and Exercises 198 13. COST OF CAPITAL AND FINANCIAL STRUCTURE 13.1Introduction 200 13.2General Principles 201 13.3 Determination of Cost of Capital 203 13.4 Cost of Debt 204 13.5 Cost of Preference Shares 209 13.6 Cost of Equity Capital 210 13.7 Access to Foreign Financial Market 212 13.8 Investment in Foreign Securities 213 13.9 Cost of Retained Earnings 214 13.10 Weighted Average Cost of Capital 215 13.11 Cost of Capital Applicable to Investment Projects of Foreign Subsidiaries 217 13.12 Financial Structure of Multinational Groups 218 13.13 Capital Structure for Foreign Subsidiaries 218 13.14 Conclusion 220 Solved Problems 221 Questions and Exercises 223 PARTY FINANCING OF FOREIGN OPERATIONS 14. 'DIFFERENT WAYS OF SETTLING FOREIGN OPERATIONS 14.1Introduction 227 14.2 Currency of Invoicing 227 14.3Different Ways of Settlement 228 14.4 Conclusion 234 Questions and Exercises 234 15. FINANCING OF INTERNATIONAL PROJECTS AND FOREIGN SUBSIDIARIES 235 15.1 Introduction 235 15.2 Different Types of Project Financing 235 15.3 Participants in International Project Financing 236 15.4 Importance of International Project Financing 237 15.5 Risks Associated with International Projects 238 15.6 Examples of International Project Financing 239 15.7 Financing Resources of Subsidiaries of Multinationals 240 15.8 External Local Resources of Financing 241 15.9 Internal Financing by the Group 243 15.10 Conclusion 244 Questions and Exercises 244 16. INTERNATIONAL CAPITAL MARKETS 235 16.1 Introduction 245 16.2 Development of Internationa] Capital Markets 246 16.3 Euro-credit Market 247 16.4 External Bond Market 249 16.5 Difference Between Euro-bonds and Euro-credits (Euro-currency Loan) 253 16.6 Euro-notes 253 16.7 Market of Euro-equities 254 16.8 Development Banks 256 16.9 Conclusion 257 Questions and Exercises 258 17. SHORT-TERM INTERNATIONAL FINANCIAL MANAGEMENT AND CONSOLIDATION OF ACCOUNTS 259 17.1 Introduction 259 17.2 International Cash Management in a Multinational Group 259 17.3 Management of Receivables 266 17.4 Inventory Management 267 17.5 Different Approaches to Accounting System 267 17.6 Consolidation of Accounts in the USA 268 17.7 Consolidation of Accounts in France 269 17.8 Consolidation and Inflation 290 17.9 Conclusion 270 Questions and Exercises 271 PART VI ORGANIZATION, CONTROL AND PERFORMANCE MEASUREMENT OF MULTINATIONAL GROUPS 18. FINANCIAL ORGANIZATION OF MULTINATIONAL GROUPS 275 18.1 Introduction 275 18.2 Multinational Groups 275 18.3 Strategy and Objectives of Multinational Groups 278 18.4 Organization of Multinational Groups 279 18.5 Organization of Financial Function 283 18.6 Exercise of the Financial Function in a Multinational Group 285 18.7 Conclusion 288 Questions and Exercises 288 19. CONTROL AND PERFORMANCE EVALUATION OF MULTINATIONAL COMPANIES 289 19.1 Introduction 289 19.2 Objectives of a Control System 289 19.3Exercise of the Control System 290 19.4 Informations Required by the Groups 291 19.5 Criteria Used in Performance Evaluation 293 19.6 Conclusion 299 Questions and Exercises 297 Appendix 299 Selected References 317 Glossary 321 Index 329
890			_aIndia
891			_aMTM
999			_c17398 _d17398