财务管理-第二十一章-课件

Chapter21 InternationalCorporateFinanceMcGraw-Hill/IrwinCopyright©2013byTheMcGraw-HillCompanies,Inc.Allrightsreserved. Chapter21McGraw-Hill/IrwinCoKeyConceptsandSkillsUnderstandhowexchangeratesarequotedandwhattheymeanKnowthedifferencebetweenspotandforwardratesUnderstandpurchasingpowerparityandinterestrateparityandtheimplicationsforchangesinexchangeratesUnderstandthebasicsofinternationalcapitalbudgetingUnderstandtheimpactofpoliticalriskoninternationalbusinessinvesting21-2KeyConceptsandSkillsUnderstChapterOutlineTerminologyForeignExchangeMarketsandExchangeRatesPurchasingPowerParityInterestRateParity,UnbiasedForwardRates,andtheInternationalFisherEffectInternationalCapitalBudgetingExchangeRateRiskPoliticalRisk21-3ChapterOutlineTerminology21-3Domesticvs.International

FinancialManagementConsiderationsinInternationalFinancialManagementNeedtoconsidertheeffectofexchangerateswhenoperatinginmorethanonecurrencyMustconsiderthepoliticalriskassociatedwithactionsofforeigngovernmentsMorefinancingopportunitieswhenyouconsidertheinternationalcapitalmarkets,whichmayreducethefirm’scostofcapital21-4Domesticvs.International

FiInternationalFinanceTerminologyAmericanDepositaryReceipt(ADR)Cross-rateEurobondEurocurrency(Eurodollars)ForeignbondsGiltsLondonInterbankOfferedRate(LIBOR)Swaps21-5InternationalFinanceTerminolGlobalCapitalMarketsThenumberofexchangesinforeigncountriescontinuestoincrease,asdoestheliquidityonthoseexchangesExchangesthatallowfortheflowofcapitalareextremelyimportanttodevelopingcountriesTheUnitedStateshasoneofthemostdevelopedcapitalmarketsintheworld,butforeignmarketsarebecomingmorecompetitiveandareoftenwillingtotrymoreinnovativewaystodobusiness21-6GlobalCapitalMarketsThenumbExchangeRatesThepriceofonecountry’scurrencyintermsofanotherMostcurrencyisquotedintermsofdollarsConsiderthefollowingquote:Euro 1.2695 .7877Thefirstnumber(1.2695)ishowmanyU.S.dollarsittakestobuy1EuroThesecondnumber(.7877)ishowmanyEurosittakestobuy$1Thetwonumbersarereciprocalsofeachother(1/1.2695=.7877)21-7ExchangeRatesThepriceofoneExample:ExchangeRatesSupposeyouhave$10,000.BasedontheratesinFigure21.1,howmanyJapaneseYencanyoubuy?Exchangerate=82.13YenperdollarBuy10,000(82.13)=821,300YenSupposeyouarevisitingMumbaiandyouwanttobuyasouvenirthatcosts1,000IndianRupees.HowmuchdoesitcostinU.S.dollars?Exchangerate=45.914rupeesperdollarCost=1,000/45.914=$21.7821-8Example:ExchangeRatesSupposeWorktheWebExampleThinkingaboutgoingtoMexicoforspringbreakorJapanforyoursummervacation?Howmanypesosoryencanyougetinexchangefor$1,000?Clickonthewebsurfertofindout21-9WorktheWebExampleThinkingaExample:TriangleArbitrageWeobservethefollowingquotes1Europer$12SwissFrancper$1.4Europer1SwissFrancWhatisthecrossrate?(1Euro/$1)/(2SF/$1)=.5Euro/SFWehave$100toinvest:buylow,sellhighBuy$100(1Euro/$1)=100Euro;useEurotobuySFBuy100Euro/(.4Euro/1SF)=250SF;useSFtobuydollarsBuy250SF/(2SF/$1)=$125Make$25risk-free21-10Example:TriangleArbitrageWeTypesofTransactionsSpottrade–exchangecurrencyimmediatelySpotrate–theexchangerateforanimmediatetradeForwardtrade–agreetodaytoexchangecurrencyatsomefuturedateandsomespecifiedprice(alsocalledaforwardcontract)Forwardrate–theexchangeratespecifiedintheforwardcontractIftheforwardrateishigherthanthespotrate,theforeigncurrencyissellingatapremium(whenquotedas$equivalents)Iftheforwardrateislowerthanthespotrate,theforeigncurrencyissellingatadiscount21-11TypesofTransactionsSpottradAbsolutePurchasing

PowerParityPriceofanitemshouldbethesameinrealterms,regardlessofthecurrencyusedtopurchaseitRequirementsforabsolutePPPtoholdTransactioncostsarezeroNobarrierstotrade(notaxes,tariffs,etc.)NodifferenceinthecommoditybetweenlocationsFormostgoods,absolutePPPrarelyholdsinpractice21-12AbsolutePurchasing

PowerParRelativePurchasing

PowerParityProvidesinformationaboutwhatcauseschangesinexchangeratesThebasicresultisthatexchangeratesdependonrelativeinflationbetweencountriesE(St)=S0[1+(hFC–hUS)]tBecauseabsolutePPPdoesn’tholdformanygoods,wewillfocusonrelativePPPfromhereonout21-13RelativePurchasing

PowerParExample:PPPSupposetheCanadianspotexchangerateis1.18CanadiandollarsperU.S.dollar.U.S.inflationisexpectedtobe3%peryear,andCanadianinflationisexpectedtobe2%.DoyouexpecttheU.S.dollartoappreciateordepreciaterelativetotheCanadiandollar?SinceexpectedinflationishigherintheU.S.,wewouldexpecttheU.S.dollartodepreciaterelativetotheCanadiandollar.Whatistheexpectedexchangerateinoneyear?E(S1)=1.18[1+(.02-.03)]1=1.168221-14Example:PPPSupposetheCanadiCoveredInterestArbitrageExaminestherelationshipbetweenspotrates,forwardrates,andnominalratesbetweencountriesAgain,theformulaswillassumethattheexchangeratesarequotedintermsofforeigncurrencyperU.S.dollarTheU.S.risk-freerateisassumedtobetheT-billrate21-15CoveredInterestArbitrageExamExample:CoveredInterestArbitrageConsiderthefollowinginformationS0=.8Euro/$ RUS=4%F1=.7Euro/$ RE=2%Whatisthearbitrageopportunity?Borrow$100at4%Buy$100(.8Euro/$)=80Euroandinvestat2%for1yearIn1year,receive80(1.02)=81.6Euroandconvertbacktodollars81.6Euro/(.7Euro/$)=$116.57andrepayloanProfit=116.57–100(1.04)=$12.57riskfree21-16Example:CoveredInterestArbiInterestRateParityBasedonthepreviousexample,theremustbeaforwardratethatwouldpreventthearbitrageopportunity.Interestrateparitydefineswhatthatforwardrateshouldbe:21-17InterestRateParityBasedontUnbiasedForwardRatesThecurrentforwardrateisanunbiasedestimateofthefuturespotexchangerateThismeansthat,onaverage,theforwardratewillequalthefuturespotrateIftheforwardrateisconsistentlytoohighThosewhowanttoexchangeyenfordollarswouldonlybewillingtotransactinthefuturespotmarketTheforwardpricewouldhavetocomedownfortradestooccurIftheforwardrateisconsistentlytoolowThosewhowanttoexchangedollarsforyenwouldonlybewillingtotransactinthefuturespotmarketTheforwardpricewouldhavetocomeupfortradestooccur21-18UnbiasedForwardRatesThecurrUncoveredInterestParityWhatweknowsofar:PPP:E(S1)=S0[1+(hFC–hUS)]IRP:F1=S0[1+(RFC–RUS)]UFR:F1=E(S1)Combiningtheformulasweget:E(S1)=S0[1+(RFC–RUS)]foroneperiodE(St)=S0[1+(RFC–RUS)]t21-19UncoveredInterestParityWhatInternationalFisherEffectCombiningPPPandUIPwecangettheInternationalFisherEffectRUS–hUS=RFC–hFCTheInternationalFisherEffecttellsusthattherealrateofreturnmustbeconstantacrosscountriesIfitisnot,investorswillmovetheirmoneytothecountrywiththehigherrealrateofreturn21-20InternationalFisherEffectComOverseasProduction:

AlternativeApproachesHomeCurrencyApproachEstimatecashflowsinforeigncurrencyEstimatefutureexchangeratesusingUIPConvertfuturecashflowstodollarsDiscountusingdomesticrequiredreturnForeignCurrencyApproachEstimatecashflowsinforeigncurrencyUsetheIFEtoconvertdomesticrequiredreturntoforeignrequiredreturnDiscountusingforeignrequiredreturnConvertNPVtodollarsusingcurrentspotrate21-21OverseasProduction:

AlternatHomeCurrencyApproachYourcompanyislookingatanewprojectinMexico.Theprojectwillcost9millionpesos.Thecashflowsareexpectedtobe2.25millionpesosperyearfor5years.Thecurrentspotexchangerateis10.91pesosperdollar.Therisk-freerateintheUSis4%,andtherisk-freerateinMexico8%.Thedollarrequiredreturnis15%.Shouldthecompanymaketheinvestment?21-22HomeCurrencyApproachYourcomForeignCurrencyApproachUsethesameinformationasthepreviousexampletoestimatetheNPVusingtheForeignCurrencyApproachRelativeinflationdifferencefromtheInternationalFisherEffectis8%-4%=4%RequiredReturn=(1.15*1.04–1)=19.6%PVoffuturecashflows=6,788,537pesosNPV=6,788,537–9,000,000=-2,211,463pesosNPV=-2,211,463/10.91=-202,70121-23ForeignCurrencyApproachUsetRepatriatedCashFlowsOften,someofthecashgeneratedfromaforeignprojectmustremainintheforeigncountryduetorestrictionsonrepatriationRepatriationcanoccurinseveralwaysDividendstoparentcompanyManagementfeesforcentralservicesRoyaltiesontheuseoftradenamesandpatents21-24RepatriatedCashFlowsOften,sShort-RunExposureRiskfromday-to-dayfluctuationsinexchangeratesandthefactthatcompanieshavecontractstobuyandsellgoodsintheshort-runatfixedpricesManagingriskEnterintoaforwardagreementtoguaranteetheexchangerateUseforeigncurrencyoptionstolockinexchangeratesiftheymoveagainstyou,butbenefitfromratesiftheymoveinyourfavor21-25Short-RunExposureRiskfromdaLong-RunExposureLong-runfluctuationscomefromunanticipatedchangesinrelativeeconomicconditionsCouldbeduetochangesinlabormarketsorgovernmentsMoredifficulttohedgeTrytomatchlong-runinflowsandoutflowsinthecurrencyBorrowingintheforeigncountrymaymitigatesomeoftheproblems21-26Long-RunExposureLong-runflucTranslationExposureIncomefromforeignoperationsmustbetranslatedbacktoU.S.dollarsforaccountingpurposes,evenifforeigncurrencyisnotactuallyconvertedbacktodollarsIfgainsandlossesfromthistranslationflowedthroughdirectlytotheincomestatement,therewouldbesignificantvolatilityinEPSExistingaccountingregulationsrequirethatallcashflowsbeconvertedattheprevailingexchangerateswithcurrencygainsandlossesaccumulatedinaspecialaccountwithinshareholdersequity21-27TranslationExposureIncomefroManagingExchange

RateRiskLargemultinationalfirmsmayneedtomanagetheexchangerateriskassociatedwithseveraldifferentcurrenciesThefirmneedstoconsideritsnetexposuretocurrencyriskinsteadofjustlookingateachcurrencyseparatelyHedgingindividualcurrenciescouldbeexpensiveandmayactuallyincreaseexposure21-28ManagingExchange

RateRiskLaPoliticalRiskChangesinvalueduetopoliticalactionsintheforeigncountryInvestmentincountriesthathaveunstablegovernmentsshouldrequirehigherreturnsTheextentofpoliticalriskdependsonthenatureofthebusinessThemoredependentthebusinessisonotheroperationswithinthefirm,thelessvaluableitistoothersNaturalresourcedevelopmentcanbeveryvaluabletoothers,especiallyifmuchofthegroundworkindevelopingtheresourcehasalreadybeendoneLocalfinancingcanoftenreducepoliticalrisk21-29PoliticalRiskChangesinvalueQuickQuizWhatdoesanexchangeratetellus?Whatistrianglearbitrage?Whatareabsolutepurchasingpowerparityandrelativepurchasingpowerparity?Whatarecoveredinterestarbitrageandinterestrateparity?WhatareuncoveredinterestparityandtheInternationalFisherEffect?Whatarethetwomethodsforinternationalcapitalbudgeting?Whatisthedifferencebetweenshort-runinterestrateexposureandlong-runinterestrateexposure?Howcanyouhedgeeachtype?Whatispoliticalrisk,andwhattypesofbusinessesfacethegreatestrisk?21-30QuickQuizWhatdoesanexchangEthicsIssuesYouare“stuck”inacustomslineenteringintoaforeigncountry.A$20“expeditingfee”couldbepaidtoforgothelineandenterimmediately.Whatdoyoudo?21-31EthicsIssuesYouare“stuck”iComprehensiveProblemAssumethatoneU.S.dollarbuys115JapaneseYen,andoneU.S.dollarbuys.54PoundSterling.Whatmustthedollar–poundexchangeratebeinordertopreventtriangulararbitrage(ignoretransactioncosts)?21-32ComprehensiveProblemAssumethEndofChapter21-33EndofChapter21-33

Chapter21 InternationalCorporateFinanceMcGraw-Hill/IrwinCopyright©2013byTheMcGraw-HillCompanies,Inc.Allrightsreserved. Chapter21McGraw-Hill/IrwinCoKeyConceptsandSkillsUnderstandhowexchangeratesarequotedandwhattheymeanKnowthedifferencebetweenspotandforwardratesUnderstandpurchasingpowerparityandinterestrateparityandtheimplicationsforchangesinexchangeratesUnderstandthebasicsofinternationalcapitalbudgetingUnderstandtheimpactofpoliticalriskoninternationalbusinessinvesting21-35KeyConceptsandSkillsUnderstChapterOutlineTerminologyForeignExchangeMarketsandExchangeRatesPurchasingPowerParityInterestRateParity,UnbiasedForwardRates,andtheInternationalFisherEffectInternationalCapitalBudgetingExchangeRateRiskPoliticalRisk21-36ChapterOutlineTerminology21-3Domesticvs.International

FinancialManagementConsiderationsinInternationalFinancialManagementNeedtoconsidertheeffectofexchangerateswhenoperatinginmorethanonecurrencyMustconsiderthepoliticalriskassociatedwithactionsofforeigngovernmentsMorefinancingopportunitieswhenyouconsidertheinternationalcapitalmarkets,whichmayreducethefirm’scostofcapital21-37Domesticvs.International

FiInternationalFinanceTerminologyAmericanDepositaryReceipt(ADR)Cross-rateEurobondEurocurrency(Eurodollars)ForeignbondsGiltsLondonInterbankOfferedRate(LIBOR)Swaps21-38InternationalFinanceTerminolGlobalCapitalMarketsThenumberofexchangesinforeigncountriescontinuestoincrease,asdoestheliquidityonthoseexchangesExchangesthatallowfortheflowofcapitalareextremelyimportanttodevelopingcountriesTheUnitedStateshasoneofthemostdevelopedcapitalmarketsintheworld,butforeignmarketsarebecomingmorecompetitiveandareoftenwillingtotrymoreinnovativewaystodobusiness21-39GlobalCapitalMarketsThenumbExchangeRatesThepriceofonecountry’scurrencyintermsofanotherMostcurrencyisquotedintermsofdollarsConsiderthefollowingquote:Euro 1.2695 .7877Thefirstnumber(1.2695)ishowmanyU.S.dollarsittakestobuy1EuroThesecondnumber(.7877)ishowmanyEurosittakestobuy$1Thetwonumbersarereciprocalsofeachother(1/1.2695=.7877)21-40ExchangeRatesThepriceofoneExample:ExchangeRatesSupposeyouhave$10,000.BasedontheratesinFigure21.1,howmanyJapaneseYencanyoubuy?Exchangerate=82.13YenperdollarBuy10,000(82.13)=821,300YenSupposeyouarevisitingMumbaiandyouwanttobuyasouvenirthatcosts1,000IndianRupees.HowmuchdoesitcostinU.S.dollars?Exchangerate=45.914rupeesperdollarCost=1,000/45.914=$21.7821-41Example:ExchangeRatesSupposeWorktheWebExampleThinkingaboutgoingtoMexicoforspringbreakorJapanforyoursummervacation?Howmanypesosoryencanyougetinexchangefor$1,000?Clickonthewebsurfertofindout21-42WorktheWebExampleThinkingaExample:TriangleArbitrageWeobservethefollowingquotes1Europer$12SwissFrancper$1.4Europer1SwissFrancWhatisthecrossrate?(1Euro/$1)/(2SF/$1)=.5Euro/SFWehave$100toinvest:buylow,sellhighBuy$100(1Euro/$1)=100Euro;useEurotobuySFBuy100Euro/(.4Euro/1SF)=250SF;useSFtobuydollarsBuy250SF/(2SF/$1)=$125Make$25risk-free21-43Example:TriangleArbitrageWeTypesofTransactionsSpottrade–exchangecurrencyimmediatelySpotrate–theexchangerateforanimmediatetradeForwardtrade–agreetodaytoexchangecurrencyatsomefuturedateandsomespecifiedprice(alsocalledaforwardcontract)Forwardrate–theexchangeratespecifiedintheforwardcontractIftheforwardrateishigherthanthespotrate,theforeigncurrencyissellingatapremium(whenquotedas$equivalents)Iftheforwardrateislowerthanthespotrate,theforeigncurrencyissellingatadiscount21-44TypesofTransactionsSpottradAbsolutePurchasing

PowerParityPriceofanitemshouldbethesameinrealterms,regardlessofthecurrencyusedtopurchaseitRequirementsforabsolutePPPtoholdTransactioncostsarezeroNobarrierstotrade(notaxes,tariffs,etc.)NodifferenceinthecommoditybetweenlocationsFormostgoods,absolutePPPrarelyholdsinpractice21-45AbsolutePurchasing

PowerParRelativePurchasing

PowerParityProvidesinformationaboutwhatcauseschangesinexchangeratesThebasicresultisthatexchangeratesdependonrelativeinflationbetweencountriesE(St)=S0[1+(hFC–hUS)]tBecauseabsolutePPPdoesn’tholdformanygoods,wewillfocusonrelativePPPfromhereonout21-46RelativePurchasing

PowerParExample:PPPSupposetheCanadianspotexchangerateis1.18CanadiandollarsperU.S.dollar.U.S.inflationisexpectedtobe3%peryear,andCanadianinflationisexpectedtobe2%.DoyouexpecttheU.S.dollartoappreciateordepreciaterelativetotheCanadiandollar?SinceexpectedinflationishigherintheU.S.,wewouldexpecttheU.S.dollartodepreciaterelativetotheCanadiandollar.Whatistheexpectedexchangerateinoneyear?E(S1)=1.18[1+(.02-.03)]1=1.168221-47Example:PPPSupposetheCanadiCoveredInterestArbitrageExaminestherelationshipbetweenspotrates,forwardrates,andnominalratesbetweencountriesAgain,theformulaswillassumethattheexchangeratesarequotedintermsofforeigncurrencyperU.S.dollarTheU.S.risk-freerateisassumedtobetheT-billrate21-48CoveredInterestArbitrageExamExample:CoveredInterestArbitrageConsiderthefollowinginformationS0=.8Euro/$ RUS=4%F1=.7Euro/$ RE=2%Whatisthearbitrageopportunity?Borrow$100at4%Buy$100(.8Euro/$)=80Euroandinvestat2%for1yearIn1year,receive80(1.02)=81.6Euroandconvertbacktodollars81.6Euro/(.7Euro/$)=$116.57andrepayloanProfit=116.57–100(1.04)=$12.57riskfree21-49Example:CoveredInterestArbiInterestRateParityBasedonthepreviousexample,theremustbeaforwardratethatwouldpreventthearbitrageopportunity.Interestrateparitydefineswhatthatforwardrateshouldbe:21-50InterestRateParityBasedontUnbiasedForwardRatesThecurrentforwardrateisanunbiasedestimateofthefuturespotexchangerateThismeansthat,onaverage,theforwardratewillequalthefuturespotrateIftheforwardrateisconsistentlytoohighThosewhowanttoexchangeyenfordollarswouldonlybewillingtotransactinthefuturespotmarketTheforwardpricewouldhavetocomedownfortradestooccurIftheforwardrateisconsistentlytoolowThosewhowanttoexchangedollarsforyenwouldonlybewillingtotransactinthefuturespotmarketTheforwardpricewouldhavetocomeupfortradestooccur21-51UnbiasedForwardRatesThecurrUncoveredInterestParityWhatweknowsofar:PPP:E(S1)=S0[1+(hFC–hUS)]IRP:F1=S0[1+(RFC–RUS)]UFR:F1=E(S1)Combiningtheformulasweget:E(S1)=S0[1+(RFC–RUS)]foroneperiodE(St)=S0[1+(RFC–RUS)]t21-52UncoveredInterestParityWhatInternationalFisherEffectCombiningPPPandUIPwecangettheInternationalFisherEffectRUS–hUS=RFC–hFCTheInternationalFisherEffecttellsusthattherealrateofreturnmustbeconstantacrosscountriesIfitisnot,investorswillmovetheirmoneytothecountrywiththehigherrealrateofreturn21-53InternationalFisherEffectComOverseasProduction:

AlternativeApproachesHomeCurrencyApproachEstimatecashflowsinforeigncurrencyEstimatefutureexchangeratesusingUIPConvertfuturecashflowstodollarsDiscountusingdomesticrequiredreturnForeignCurrencyApproachEstimatecashflowsinforeigncurrencyUsetheIFEtoconvertdomesticrequiredreturntoforeignrequiredreturnDiscountusingforeignrequiredreturnConvertNPVtodollarsusingcurrentspotrate21-54OverseasProduction:

AlternatHomeCurrencyApproachYourcompanyislookingatanewprojectinMexico.Theprojectwillcost9millionpesos.Thecashflowsareexpectedtobe2.25millionpesosperyearfor5years.Thecurrentspotexchangerateis10.91pesosperdollar.Therisk-freerateintheUSis4%,andtherisk-freerateinMexico8%.Thedollarrequiredreturnis15%.Shouldthecompanymaketheinvestment?21-55HomeCurrencyApproachYourcomForeignCurrencyApproachUsethesameinformationasthepreviousexampletoestimatetheNPVusingtheForeignCurrencyApproachRelativeinflationdifferencefromtheInternationalFisherEffectis8%-4%=4%RequiredReturn=(1.15*1.04–1)=19.6%PVoffuturecashflows=6,788,537pesosNPV=6,788,537–9,000,000=-2,211,463pesosNPV=-2,211,463/10.91=-202,70121-56ForeignCurrencyApproachUsetRepatriatedCashFlowsOften,someofthecashgeneratedfromaforeignprojectmustremainintheforeigncountryduetorestrictionsonrepatriationRepatriationcanoccurinseveralwaysDividendstoparentcompanyManagementfeesforcentralservicesRoyaltiesontheuseoftradenamesandpatents21-57RepatriatedCashFlowsOften,sShort-RunExposureRiskfromday-to-dayfluctuationsinexchangeratesandthefactthatcompanieshavecontractstobuyandsellgoodsintheshort-runatfixedpricesManagingriskEnterintoaforwardagreementtoguaranteetheexchangerateUseforeigncurrencyoptionstolockinexchangeratesiftheymoveagainstyou,butbenefitfromratesiftheymoveinyourfavor21-58Short-RunExposureRiskfromdaLong-RunExposureLong-runfluctuationscomefromunanticipatedchangesinrelativeeconomicconditionsCouldbeduetochangesinlabormarketsorgovernmentsMoredifficulttohedgeTrytomatchlong-runinflowsandoutflowsinthecurrencyBorrowingintheforeigncountrymaymitigatesomeoftheproblems21-59Long-RunExposureLong-runflucTranslationExposureIncomefromforeignoperationsmustbetranslatedbacktoU.S.