structure – refers to the proportion of LT debt and equity and the particular forms of capital chosen to finance the assets of the firm ➢ Mgment must choose: ■ the proportions of D and E ■ the currency of denomination ■ fixed or floating rate interest payments ■ indenture provisions ■ conversion features ■ seniority ■ maturity o Perfect mkt assumptions: -frictionless mkts -equal access to mkt prices -rational investors -equal access to costless
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Economy?: A New Look at the Determinants of Growth * Drivers Behind the Scene: Determinants of Economy Growth in Asian Countries Excerpt * Researchers found that private and public investments, lower financial risk, higher FDI and flexible exchange rate regimes appears to support Asian countries' economy growth, while more open capital accounts marginally reduce growth facing financial crisis. Taglines/Pull Quotes: * “The majority of Asian countries have some form of flexible regime that
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criteria: 1. Its value changes in response to a change in an "underlying". The underlying can be the price of a commodity, such as soybeans, or a financial instrument, such as a fixed rate bond. It can also be a rate such as a foreign exchange rate or a specified interest rate, for example, the London Interbank Offer Rate; It requires little or no initial net investment; and It is settled at a future date. 2. 3. Chapter 10 Page 1 TABLE 10.1 Examples of derivative
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smaller ones. Sources of finance can be classified into internal sources (raised from within the organisation) and external (raised from an outside source). There are five internal sources of finance, owner’s investment, retained profits, sale of fixed assets, sale of stock and debt collection. There are also five external sources of finance, bank loan or overdraft, additional partners, share issue, leasing, hire purchase mortgage, trade credit and government grants. For a high-tech company, firstly
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Executive Summary With the world demand for oil and gas is increasing and likely to increase further and as a developing country creating a best way to produce oil and gas to the unlimited demand. Petroliam Nasional Berhad(PETRONAS) has decided to analyse its business venture in three different countries all over the world. The countries are United States, China and Russia. Investing in international country may give out some financial risk. This paper is discussing the method Petronas can use
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Objective of hedging is to ensure: Predictability in Income Statement thereby reducing cash flow volatility. Revenue is generated & receivables are collected at budgeted rates Maintaining margins on long term projects as these projects are priced & bid with an exchange rate assumption, which needs to be protected to ensure desired margins Managing the translation risks in case of multiple geographies & overseas entities Best Practices
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Most of the countries tried to reestablish the gold standard after World War I, but it had been totally collapsed during the Great Depression in 1930s. Some economists said comply with the gold standard had prohibited monetary authorities from increasing the money supply rapidly enough to recover the economies. Therefore, the representatives of most of the world's leading nations met at Bretton Woods, New Hampshire, in 1944 to create a new international monetary system. The representatives had decided
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hedging can be connected to an insurance policy which minimizes the effect of foreign exchange risks. Besides, currency hedging enables an investors to minimize and direct the risk engaged in foreign investment, as well as reduce the losses. Also, it can be used to protect the value of the foreign currency cash flows of a multinational company by allowing hedgers or investors to reduce the impact of foreign exchange risks (Thinking Made Easy, 2010). Although
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Global Financing and Exchange Rate Mechanisms of Hard and Soft Currencies Renita McBath MGT/448 University of Phoenix December 1, 2011 Professor David Grier Global Financing and Exchange Rate Mechanisms of Hard and Soft Currencies Trading, bartering, buying, and selling are known as the act doing business. The action of doing business has been a way of life for human beings for Centuries. At some point in our history the difficulty
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Exercise 1: Chapter 15 Question 14 The national income can be defined as the sum of all the output of the economy nationwide, where the gross national product (GDP) measures the value of that economy. Though not all economy inputs are considered in the GDP measurement, and then arises the question of the uncertainty or shortcomings of the national income account. I remember when I first came in the United States my householder does not have laundry machines; the household wash their clothes themselves
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