Beruflich Dokumente
Kultur Dokumente
8e
By Charles W.L. Hill
20-3
If the net present value of the discounted cash flows is greater than zero, the firm should go ahead with the project
20-4
Cash flows to the parent may be lower because of host country limits on the repatriation of profits, host country local reinvestment requirements, etc.
20-6
Political change can result in the expropriation of a firms assets, or complete economic collapse that renders a firms assets worthless
20-7
20-8
20-9
2.
How the financial structure (debt vs. equity) of the foreign affiliate should be configured
need to decide whether to adopt local capital structure norms or maintain the structure used in the home country
Most experts suggest that firms adopt the structure that minimizes the cost of capital, whatever that may be
20-10
Most banks also charge a transfer fee for moving cash from one location to another Multilateral netting can reduce the number of transactions between subsidiaries and the number of transaction costs
20-12
Double taxation occurs when the income of a foreign subsidiary is taxed by the hostcountry government and by the homecountry government
20-13
20-15
Firms that use more than one of these techniques are unbundling
20-16
A fee is compensation for professional services or expertise supplied to a foreign subsidiary by the parent company or another subsidiary
royalties and fees are often tax-deductible locally
20-18
20-19
20-22
20-23
The use of centralized depositories is expected to increase because of the globalization of capital markets and the removal of barriers to the free flow of capital across borders
20-24
Under multilateral netting, the concept is extended to multiple subsidiaries within an international business
20-25
20-26
20-27
20-28
Review Question
Which of the following is not one of the decision areas in financial management?
a) cash operations decisions b) investment decisions c) financing decisions d) money management decisions
20-29
Review Question
The fee for moving cash from one location to another is called
a) the money management fee b) the transaction cost c) the transfer fee d) the cost of capital
20-30
Review Question
Compared to the other countries, corporate income tax rates in ________ are relatively low.
Review Question
A __________ specifies that parent companies are not taxed on foreign source income until they actually receive a dividend. a) tax credit b) deferral principle c) tax haven d) tax treaty
20-32
Review Question
Firms can transfer liquid funds across borders using all of the following techniques except
a) dividend remittances b) royalty payments and fees c) transfer prices d) backing loans
20-33
Review Question
The most common method of transferring funds from subsidiaries to the parent is through a) dividend remittances b) royalty payments and fees c) transfer prices d) backing loans
20-34