TAILIEUCHUNG - Lecture Multinational financial management: Lecture 18 - Dr. Umara Noreen

After completing this chapter, students will be able to: To explain how corporate and country characteristics influence an MNC’s cost of capital; to explain why there are differences in the costs of capital across countries; and to explain how corporate and country characteristics are considered by an MNC when it establishes its capital structure. | Multinational Cost of Capital and Capital Structure 18 Lecture Country Differences in the Cost of Equity A firm’s return on equity can be measured by the risk-free interest rate plus a premium that reflects the risk of the firm. The cost of equity represents an opportunity cost, and is thus also based on the available investment opportunities. It can be estimated by applying a price-earnings multiple to a stream of earnings. High PE multiple low cost of equity Lexon’s Estimated Weighted Average Cost of Capital (WACC) for Financing a Project To derive the overall cost of capital, the costs of debt and equity are combined, using the relative proportions of debt and equity as weights. Using the Cost of Capital for Assessing Foreign Projects When the risk level of a foreign project is different from that of the MNC, the MNC’s weighted average cost of capital (WACC) may not be the appropriate required rate of return for the project. There are various ways to account for this risk .

• Tài chính doanh nghiệp
• Multinational financial management
• Financial management
• Lecture Multinational financial management
• Multinational cost
• Capital structure
• Costs of capital
• Multinational capital budgeting
• Multinational cost of capital
• Capital budgeting analysis
• International project
• Country risk analysis
• Multinational corporation
• Capital budgeting
• International financial reporting standards
• Foreign exchange risk management
• International cash management
• Cash flow analysis
• Centralized cash management
• Lesson International financial management
• International financial management
• Globalization Multinational Firm
• The Multinational Firm
• Multinational Corporations
• Foreign Exchange Risk
• Quản lý tài chính
• Quản lý tài chính đa quốc gia
• Multinational finance
• Finance careers
• Optimizing cash flows
• Investing excess cash
• Management control
• Corporate control
• MNCs Financial Management
• Goals of MNC
• The rise of the MNCs
• Internationalization of Business
• Multinational Financial Management Theory
• Cash flows
• Multiple choice
• International equity markets
• Measures of liquidity
• Market structure