Questions from Financial Management

Q: What methods do taxing authorities use to eliminate or mitigate the evil

What methods do taxing authorities use to eliminate or mitigate the evil of double taxation?

Q: Under what conditions will the foreign subsidiary’s financial structure become relevant?

Under what conditions will the foreign subsidiary’s financial structure become relevant?

Q: Explain and compare forward versus backward internalization.

Explain and compare forward versus backward internalization.

Q: The Beta Corporation has an optimal debt ratio of 40 percent.

The Beta Corporation has an optimal debt ratio of 40 percent. Its cost of equitycapital is 12 percent and its before-tax borrowing rate is 8 percent. Given a marginaltax rate of 35 percent, calculate...

Q: The current spot exchange rate is HUF250/$1.00.

The current spot exchange rate is HUF250/$1.00. Long-run inflation in Hungaryis estimated at 10 percent annually and 3 percent in the United States. If PPP isexpected to hold between the two countries...

Q: You plan to visit Geneva, Switzerland, in three months to

You plan to visit Geneva, Switzerland, in three months to attend an internationalbusiness conference. You expect to incur a total cost of SF5,000 for lodging,meals, and transportation during your stay...

Q: Discuss the conditions under which the capital expenditure of a foreign subsidiary

Discuss the conditions under which the capital expenditure of a foreign subsidiary might have a positive NPV in local currency terms but be unprofitable from the parent firm’s perspective.

Q: Why is capital budgeting analysis so important to the firm?

Why is capital budgeting analysis so important to the firm?

Q: Suppose that one year after the inception of the currency swap betweenCentralia

Suppose that one year after the inception of the currency swap betweenCentralia and the Spanish MNC, the U.S. dollar fixed rate has fallen from8 to 6 percent and the euro zone fixed rate for euros has...

Q: Discuss the regulatory and macroeconomic factors that contributed to the creditcrunch of

Discuss the regulatory and macroeconomic factors that contributed to the creditcrunch of 2007–2008.