Fundamentals of Multinational Finance, Global Edition

Series
Pearson
Author
Michael H. Moffett / Arthur I. Stonehill / David K. Eiteman  
Publisher
Pearson
Cover
Softcover
Edition
6
Language
English
Total pages
528
Pub.-date
August 2020
ISBN13
9781292215211
ISBN
1292215216
Related Titles



Description

For undergraduate courses in International Financial Management, International Business Finance, or International Finance.

 

Real-world examples introduce students to global financial management strategy

Fundamentals of Multinational Finance helps prepare tomorrow’s business leaders to comprehend global markets and lead organizations through a constantly changing global environment. Via illuminating case studies and real­-world examples, students are introduced to the fundamental concepts and tools necessary to implement an effective global financial management strategy. The 6th Edition reflects the juxtaposed forces of an increasingly digital global marketplace and a resurgence of nationalist culture and identity. Financial forces, markets, and management are in many ways at the crux of this challenge. This edition reflects a business world trying to find a new balance between business startups like the micro-multinational, a maturing China, a separatist Britain (Brexit), and an attempt by governments globally to channel, regulate (and tax) multinational firms that continue to grow in stature and strength.

 

MyLabTM Finance not included. Students, if MyLab is a recommended/mandatory component of the course, please ask your instructor for the correct ISBN and course ID. MyLab should only be purchased when required by an instructor. Instructors, contact your Pearson rep for more information.


MyLab is an online homework, tutorial, and assessment product designed to personalize learning and improve results. With a wide range of interactive, engaging, and assignable activities, students are encouraged to actively learn and retain tough course concepts.

 

Features

This title is a Pearson Global Edition. The Editorial team at Pearson has worked closely with educators around the world to include content that is especially relevant to students outside the United States.

 

About the book

 

Focus on today’s challenges

This edition explores the management challenges faced by today’s business leaders by focusing on the following three themes:

  • Organizations. Multinational enterprises (MNEs) apply to organizations of all kinds--the publicly traded, the privately held, the state-­run, the state-­owned organizations--all forms that permeate global business today.
  • Markets. Country markets like that of China and India are no longer the sources of low­-cost labor for global manufacturers. They are increasingly the focus for sales and growth of all firms, manufacturing and services, for earnings and growth. Although they may still be categorized as “emerging,” they are the economic drivers and primary challenges for global finance and global financial management.
  • Financial leadership. The leaders of MNEs face numerous foreign exchange and political risks. These risks can be daunting, but they also present opportunities for creating value if properly understood. These opportunities and risks are most effectively understood in the context of the global business itself, and the ability of management to integrate the strategic and financial challenges that business faces.

 

Provide students with updated information

  • UPDATED! Increased detail is given on changing currency regimes, theory, and practice, as emerging market currencies become ever-greater contributors to global cash flow.
  • EXPANDED! Sections introduce readers to the challenges faced by governments and central banks as cryptocurrencies like Bitcoin have shaken the very foundations of traditional definitions of “currency.”
  • NEW! Content helps students discover the growing complexity of major emerging markets, which are more open to capital movements, but also subject to sudden government or central bank intervention in pursuit of sovereign goals and objectives.
  • UPDATED! Increased coverage of the multitude of different currency regimes and devices used by sovereigns over their currencies and markets--currencies like the Chinese yuan, the Russian ruble, the Indian rupee, the Turkish lira, and the South African rand, have been added.
  • A mix of currency notations and symbols are used--both the common three-letter currency codes and the traditional currency symbols (which are seeing a resurgence as countries like Russia and Turkey have introduced new “currency identities” of their own).

 

Get students straight to the point with streamlined content

Concise text quickly provides students with all of the information they need to know. A more intense exploration of global finance without sacrificing depth or detail was achieved through the integration of a number of concepts and topics.

  • International monetary system chapters cover both the fundamental principles of defining a currency with the complexities of macroeconomic policy and digital exchange.
  • Creation and use of currency and interest rate derivatives for hedging and speculation is covered in selectively reorganized chapters.
  • Raising equity capital and international portfolio theory complete a unified exploration of the global cost and availability of capital.
  • Sources of capital and changing financial structures used by multinational firms provide a more integrated presentation, combining theory and current practice.

 

Offer in­-text learning support

The following features help draw students into the material and aid them as they learn:

  • A student-­friendly writing style is combined with a structured presentation of material.
  • A wealth of illustrations and exhibits provide a visual parallel to the concepts and content presented. The entire book uses a multi­color, attention­-grabbing presentation to keep students engaged.
  • Real-­world examples illustrate the theory with accounts of actual business practices.
  • A running case on a hypothetical US-based firm, Trident Corporation, provides a cohesive framework for the multifaceted globalization process, and is reinforced in several end-­of-­chapter problems.
  • End-of-chapter Mini-­Cases illustrate the chapter content and extend it to the multinational financial business environment.
  • Mini-Cases introduce students to currency complexity themes.
  • Global Finance in Practice boxes illuminate the theory with accounts of real-world business practices and give insight in the subtle nuances of the conduct of financial management. These applications extend the concepts without increasing the length of text.
  • Online resources are leveraged throughout the text in a variety of applications. Many end-­of-­chapter exercises encourage students to use the Internet, while a variety of Internet references are dispersed throughout each chapter.
  •  End­-of-­chapter questions and problems assess students’ understanding of the course material. All end-­of-­chapter problems are solved using spreadsheet solutions. Select end-of-­chapter problem answers, indicated by an asterisk (*), are found at the back of the book.

 

New content in the 6th edition

  • NEW! Interest Rate Risk and Swaps. A new chapter has been introduced that details the various interest rate risks of the MNE and the practical use of interest rate and cross currency swaps.
  • NEW! The Impossible Trinity. A core international financial principle, the Impossible Trinity’s use as a unifying theoretical link across multiple subjects and chapters, has been expanded.
  • NEW! The Foreign Exchange Market and Digital Trade. New material in this edition explores in depth how the changing structure of the global foreign exchange market—trading, communication, and settlement—is posing challenges for private players and public regulators and overseers.
  • NEW! International Taxation. Integrally linked to a world of digital commerce, multinational tax management continues to rise in its significance in multinational financial management. We have greatly expanded our coverage of this truly critical financial management topic.
  • NEW! Political Risk and Financial Losses. The chapter on foreign direct investment and political risk has been revised to reflect the growing use of restrictions on convertibility, transferability, and the possibility of repudiation or expropriation.
  • NEW! Edgier Mini-Cases. Eleven of the eighteen mini-cases are completely new to the 6th edition, and explore many of the edgier debates rising between global business, social policy, and corporate social responsibility. Topics include Argentine debt and vulture investors, Apple’s global profit positioning and tax structure, Brexit and its potential impact on Rolls Royce, Volkswagen’s governance structure and its defeat device ‘strategy,’ political risk in Kazakhstan’s oil and gas industry, and crowdfunding startups in Kenya, to name but a few.
  • NEW! Expanded Quantitative Applications. We have worked diligently to increase the quantitative elements across subjects and chapters to push students to explore the depth of analysis and comprehension.

 

 

MyLabTM Finance not included. Students, if MyLab is a recommended/mandatory component of the course, please ask your instructor for the correct ISBN and course ID. MyLab should only be purchased when required by an instructor. Instructors, contact your Pearson representative for more information.

  • Question Help. MyLab Finance homework and practice questions correlate with the textbook, and generate algorithmically to give students unlimited opportunity for mastery of concepts. If students get stuck, Learning Aids including Help Me Solve This, View an Example, and a Financial Calculator walk them through the problem and identify helpful info in the text, giving them assistance when they need it most.
  • Financial Calculator. Students have access to a fully functional financial calculator inside MyLab Finance and a financial calculator app that they can download to their iPhone®, iPad®, or Android device.
  • Video Series. Conceptual videos on several topics that can be challenging for students to grasp, including Default Risk, Market Efficiency, Diversification, Mutual Fund Performance, and more are available for instructors to assign in the assignment manager, or for student self-study in the multimedia library.
  • Learning Catalytics™ helps you generate class discussion, customize your lecture, and promote peer-to-peer learning with real-time analytics. As a student response tool, Learning Catalytics uses students’ smartphones, tablets, or laptops to engage them in more interactive tasks and thinking.
  • NEW! Upload a full PowerPoint® deck for easy creation of slide questions.
  • NEW! Team names are no longer case sensitive.
  • Help your students develop critical thinking skills.
  • Monitor responses to find out where your students are struggling.
  • Rely on real-time data to adjust your teaching strategy.
  • Automatically group students for discussion, teamwork, and peer-to-peer learning.

Reporting Dashboard. View, analyze, and report learning outcomes clearly and easily, and get the information you need to keep your students on track throughout the course, with the new Reporting Dashboard. Available via the MyLab Finance Gradebook and fully mobile-ready, the Reporting Dashboard presents student performance data at the class, section, and program levels in an accessible, visual manner.

 

Personalized Learning. Not every student learns the same way or at the same rate. With the growing need for acceleration through many courses, it's more important than ever to meet students where they learn. Personalized learning in MyLab Finance gives you the flexibility to incorporate the approach that best suits your course and students.

  • The Study Plan acts as a tutor, providing personalized recommendations for each of your students based on his or her ability to master the learning objectives in your course. This allows students to focus their study time by pinpointing the precise areas they need to review, and allowing them to use customized practice and learning aids—such as videos, tutorials, and more—to get them back on track. Using the report available in the Gradebook, you can then tailor course lectures to prioritize the content where students need the most support--offering you better insight into classroom and individual performance.

Worked Out Solutions. Sometimes students need more than just the correct answer to understand their mistakes; they need to understand how to get to that correct answer. Worked Out Solutions is available to students when they are reviewing their submitted and graded homework. The Worked Out Solutions provide step-by-step explanations on how to solve the problem using the exact numbers and data that was presented in the problem. Instructors can also access the Worked Out Solutions in preview and review mode.

 

UPDATED! HTML5 Player. In addition to matching the Flash player’s support of Accessibility requirements, the HTML5 player has a new “Show Work” feature to allow students to enter text either from a keyboard or stylus and to draw freehand on different backgrounds, such as a coordinate graph, with multiple fonts and colors. Students can also continue to upload images such as phone-photos of handwritten work. Printing enhancements include:

  • a more pen-and-paper-friendly layout of exercises
  • the ability for instructors to choose whether to print the header; to include an honor statement; and to print with answers in line, after each question, or on a separate sheet

New to this Edition

About the book

 

Provide students with updated information

  • Increased detail is given on changing currency regimes, theory, and practice, as emerging market currencies become ever-­greater contributors to global cash flow.
  • Sections introduce readers to the challenges faced by governments and central banks as cryptocurrencies like Bitcoin have shaken the very foundations of traditional definitions of “currency.”
  • Content helps students discover the growing complexity of major emerging markets, which are more open to capital movements, but also subject to sudden government or central bank intervention in pursuit of sovereign goals and objectives.
  • Increased coverage of the multitude of different currency regimes and devices used by sovereigns over their currencies and markets--currencies like the Chinese yuan, the Russian ruble, the Indian rupee, the Turkish lira, and the South African rand, have been added.

 

New content in the 6th edition

  • Interest Rate Risk and Swaps. A new chapter has been introduced that details the various interest rate risks of the MNE and the practical use of interest rate and cross-currency swaps.
  • The Impossible Trinity. A core international financial principle, the Impossible Trinity’s use as a unifying theoretical link across multiple subjects and chapters, has been expanded.
  • The Foreign Exchange Market and Digital Trade. New material in this edition explores in depth how the changing structure of the global foreign exchange market--trading, communication, and settlement--is posing challenges for private players and public regulators and overseers.
  • International Taxation. Integrally linked to a world of digital commerce, multinational tax management continues to rise in its significance in multinational financial management. We have greatly expanded our coverage of this truly critical financial management topic.
  • Political Risk and Financial Losses. The chapter on foreign direct investment and political risk has been revised to reflect the growing use of restrictions on convertibility, transferability, and the possibility of repudiation or expropriation.
  • Edgier Mini-Cases. Eleven of the eighteen mini-cases are completely new to the 6th edition, and explore many of the edgier debates rising between global business, social policy, and corporate social responsibility. Topics include Argentine debt and vulture investors, Apple’s global profit positioning and tax structure, Brexit and its potential impact on Rolls Royce, Volkswagen’s governance structure and its defeat device ‘strategy,’ political risk in Kazakhstan’s oil and gas industry, and crowdfunding startups in Kenya, to name but a few.
  • Expanded Quantitative Applications. We have worked diligently to increase the quantitative elements across subjects and chapters to push students to explore the depth of analysis and comprehension.

 

 

MyLabTM Finance not included. Students, if MyLab is a recommended/mandatory component of the course, please ask your instructor for the correct ISBN and course ID. MyLab should only be purchased when required by an instructor. Instructors, contact your Pearson representative for more information.

 

Learning Catalytics™ helps you generate class discussion, customize your lecture, and promote peer-to-peer learning with real-time analytics. As a student response tool, Learning Catalytics uses students’ smartphones, tablets, or laptops to engage them in more interactive tasks and thinking.

  • o Upload a full PowerPoint® deck for easy creation of slide questions.
  • o Team names are no longer case sensitive.

HTML5 Player. In addition to matching the Flash player’s support of Accessibility requirements, the HTML5 player has a new “Show Work” feature to allow students to enter text either from a keyboard or stylus and to draw freehand on different backgrounds, such as a coordinate graph, with multiple fonts and colors. Students can also continue to upload images such as phone-photos of handwritten work. Printing enhancements include:

  • a more pen-and-paper-friendly layout of exercises
  • the ability for instructors to choose whether to print the header; to include an honor statement; and to print with answers in line, after each question, or on a separate sheet

Table of Contents

PART I: GLOBAL FINANCIAL ENVIRONMENT  

1. Multinational Fin Mgmt: Challenges & Opportunities

2. The International Monetary System

3. The Balance of Payments

4. Financial Goals and Corporate Governance

 

PART II: FOREIGN EXCHANGE THEORY & MARKETS  

5. The Foreign Exchange Market

6. International Parity Conditions

 Appendix: An Algebraic Primer to Parity Conditions

7. Foreign Currency Futures & Options  

8. Interest Rate Derivatives & Swaps

9. Exchange Rate Determination & Forecasting

 

PART III: FOREIGN EXCHANGE EXPOSURE

10. Transaction Exposure  

11. Translation Exposure

12. Operating Exposure

 

PART IV: FINANCING THE GLOBAL FIRM

13. The Global Cost and Availability of Capital

14. Funding the Multinational Firm   

15. Multinational Tax Management

16. International Trade Finance

 

PART V: FOREIGN INVESTMENTS & OPERATIONS   

17. Foreign Direct Investment & Political Risk

18. Multinational Capital Budgeting & Cross-Border Acquisitions

 

Answers to selected end-of-chapter problems