P. 1
MF0015 Scribd

MF0015 Scribd

|Views: 212|Likes:
Published by Monika Handa
Dear students to get solved assignments of SMU call us at 8510092683 or mail us at mhanda74@gmail.com.charges 1000 Rs./semester.
Dear students to get solved assignments of SMU call us at 8510092683 or mail us at mhanda74@gmail.com.charges 1000 Rs./semester.

More info:

Categories:Types, School Work
Published by: Monika Handa on Apr 11, 2013
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as DOCX, PDF, TXT or read online from Scribd
See more
See less

05/14/2014

pdf

text

original

MF0015 – International Financial Management

Dear students to get solved assignments of SMU call us at 8510092683 or mail us at

Q1. How does International Financial Management helps in maximizing the wealth of the shareholders? Ans: Effective financial management is not limited to the application of the latest business techniques or functioning more efficiently but includes maximization of wealth meaning that it aims to offer profit to the shareholder, the owners of the businesses and to ensure that they gain benefits from the business decisions that have been made. Q2. Explain the major accounts and sub categories of the balance of payments statement. Ans: The BOP consists of current account, capital account and reserve account. The current account records flow of goods, services and unilateral transfers. The capital account shows the transactions that involve changes in the foreign financial assets and liabilities of a country. The reserve account records transactions pertaining to reserve assets like monetary gold, special drawings right (SDRs) and assets denominated in foreign currencies. Q3. Define what you mean by Forward Markets. Discuss the differences between futures options and spot options. Ans: In the forward market, contracts are made to buy and sell currencies for future delivery, say, after a fortnight, one month two months, or three months. Q4. Define cost of capital. Discuss the approaches that are employed to calculate the cost of equity capital. Ans: Cost of capital is another name for required rate of return. It is the minimum rate of return required by a firm on its investment in order to provide the rate of return required by its suppliers of capital. The suppliers of capital are equity shareholders and debt holders. A firm may have cost of equity, cost of retained earnings and cost of debt. The cost of capital is the combined cost of all sources of capital. As the components are combined according to the weight of each component of the firm’s capital structure, the overall cost of capit al is also known as weighted average cost of capital (WACC). Q5. Explain the techniques adopted by MNCs to reduce country risk. Ans: Measures of country risk do not distinguish different risks facing different industries. They measure only the risk of countries. An MNC will have to reduce the country risk to gain. The various techniques that can be adopted by them are summarized as follows:

Q6. Define the benefits of FDI. State the cost of FDI to the home country. Ans: When direct investment flows from one country to another, it creates benefits for both the home country and the host country but at a certain cost. We will discuss the benefits derived and the costs incurred on the FDI to both the countries involved.

Dear students to get solved assignments of SMU call us at 8510092683 or mail us at

You're Reading a Free Preview

Download
scribd
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->