Question 1

In general, which has the shorter maturity and is more appropriate for funding short-term inventory needs?

Accepted Answer

A) commercial paper 
B) Euro-Medium-Term notes (EMTNs) 
C) the international bond market 
D) all of the above 
A) commercial paper 
B) Euro-Medium-Term notes (EMTNs) 
C) the international bond market 
D) all of the above

Question 2

The domestic theory of optimal capital structure does not need to be modified for MNEs.

Accepted Answer

A) True 
 B)False

Question 3

The term "euro" as used in the euro equity market implies:

Accepted Answer

A) the issuers are located in Europe. 
B) the investors are located in Europe. 
C) both A and B 
D) none of the above 
A) the issuers are located in Europe. 
B) the investors are located in Europe. 
C) both A and B 
D) none of the above

Question 4

The Euro-medium-term-note (EMTN)has filled a substantial niche market in global financing. What are the distinguishing characteristics of the EMTN and why is it such a popular form of financing for MNEs?

Accepted Answer

EMTNs have maturity between the long-liv

Question 5

In theory, the MNE should support ________ debt ratios than a purely domestic firm because their cash flows are ________.

Accepted Answer

A) lower; more stable due to international diversification 
B) lower; less stable due to international diversification 
C) higher; more stable due to international diversification 
D) higher; less stable due to international diversification 
A) lower; more stable due to international diversification 
B) lower; less stable due to international diversification 
C) higher; more stable due to international diversification 
D) higher; less stable due to international diversification

Question 6

TropiKana Inc., a U.S firm, has just borrowed euro 1,000,000 to make improvements to an Italian fruit plantation and processing plant. If the interest rate is 5.50% per year and the Euro depreciates against the dollar from $1.40/€ at the time the loan was made to $1.35/€ at the end of the first year, how much interest and principle will TropiKana pay at the end of the first year if they repay the entire loan plus interest (rounded)?

Accepted Answer

A) $1,477,000 
B) $1,055,000 
C) €1,424,250 
D) $1,424,250 
A) $1,477,000 
B) $1,055,000 
C) €1,424,250 
D) $1,424,250

Question 7

TropiKana Inc., a U.S firm, has just borrowed euro 1,000,000 to make improvements to an Italian fruit plantation and processing plant. If the interest rate is 5.50% per year and the Euro depreciates against the dollar from $1.40/€ at the time the loan was made to $1.35/€ at the end of the first year, how much interest will TropiKana pay at the end of the first year (rounded)?

Accepted Answer

A) $55,000 
B) €74,250 
C) $74,250 
D) $77,000 
A) $55,000 
B) €74,250 
C) $74,250 
D) $77,000

Question 8

Strategic alliances are normally formed by firms that expect to gain synergies from which of the following?

Accepted Answer

A) economies of scale 
B) economies of scope 
C) complementary marketing 
D) all of the above 
A) economies of scale 
B) economies of scope 
C) complementary marketing 
D) all of the above

Question 9

The least liquid stock markets as identified by the authors offer little liquidity for their own domestic firms, and are of little value to foreign firms.

Accepted Answer

A) True 
 B)False

Question 10

The number of foreign firms traded on the London exchange is ________ than the number traded on the NYSE, and the costs of listing and disclosure in London are ________ those for the NYSE.

Accepted Answer

A) less than; less than 
B) less than; greater than 
C) greater than; less than 
D) greater than; greater than 
A) less than; less than 
B) less than; greater than 
C) greater than; less than 
D) greater than; greater than

Question 11

Which of the following were NOT identified by the authors as an alternative instrument to source equity in global markets?

Accepted Answer

A) sale of a directed public share issue to investors in a target market 
B) private placements under SEC rule 144a 
C) sale of shares to private equity funds 
D) All of the above are alternatives to source equity instruments. 
A) sale of a directed public share issue to investors in a target market 
B) private placements under SEC rule 144a 
C) sale of shares to private equity funds 
D) All of the above are alternatives to source equity instruments.

Question 12

TropiKana Inc., a U.S firm, has just borrowed $1,000,000 to make improvements to an Italian fruit plantation and processing plant. If the interest rate is 6.00% per year, how much interest will they pay in the first year?

Accepted Answer

A) $6,000 
B) $60,000 
C) $600,000 
D) €60,000 
A) $6,000 
B) $60,000 
C) $600,000 
D) €60,000

In general, which has the shorter maturity and is more appropriate for funding short-term inventory needs?

The domestic theory of optimal capital structure does not need to be modified for MNEs.

The term "euro" as used in the euro equity market implies:

The Euro-medium-term-note (EMTN)has filled a substantial niche market in global financing. What are the distinguishing characteristics of the EMTN and why is it such a popular form of financing for MNEs?

In theory, the MNE should support debt ratios than a purely domestic firm because their cash flows are .

Strategic alliances are normally formed by firms that expect to gain synergies from which of the following?

The least liquid stock markets as identified by the authors offer little liquidity for their own domestic firms, and are of little value to foreign firms.

The number of foreign firms traded on the London exchange is than the number traded on the NYSE, and the costs of listing and disclosure in London are those for the NYSE.

Which of the following were NOT identified by the authors as an alternative instrument to source equity in global markets?

TropiKana Inc., a U.S firm, has just borrowed $1,000,000 to make improvements to an Italian fruit plantation and processing plant. If the interest rate is 6.00% per year, how much interest will they pay in the first year?

Current Multinational Challenges and the Global Economy

Corporate Ownership, Goals, and Governance

The International Monetary System

The Balance of Payments

The Continuing Global Financial Crisis

The Foreign Exchange Theory and Markets

International Parity Conditions

Foreign Currency Derivatives and Swaps

Foreign Exchange Rate Determination and Forecasting

Transaction Exposure

Translation Exposure

Operating Exposure

The Global Cost and Availability of Capital

Multinational Tax Management

International Portfolio Theory and Diversification

Foreign Direct Investment and Political Risk

Multinational Capital Budgeting and Cross-Border Acquisitions

Working Capital Management

International Trade Finance

Filters

Exam 14: Raising Equity and Debt Globally

In general, which has the shorter maturity and is more appropriate for funding short-term inventory needs?

The domestic theory of optimal capital structure does not need to be modified for MNEs.

The term "euro" as used in the euro equity market implies:

The Euro-medium-term-note (EMTN)has filled a substantial niche market in global financing. What are the distinguishing characteristics of the EMTN and why is it such a popular form of financing for MNEs?

In theory, the MNE should support ________ debt ratios than a purely domestic firm because their cash flows are ________.

Strategic alliances are normally formed by firms that expect to gain synergies from which of the following?

The least liquid stock markets as identified by the authors offer little liquidity for their own domestic firms, and are of little value to foreign firms.

The number of foreign firms traded on the London exchange is ________ than the number traded on the NYSE, and the costs of listing and disclosure in London are ________ those for the NYSE.

Which of the following were NOT identified by the authors as an alternative instrument to source equity in global markets?

TropiKana Inc., a U.S firm, has just borrowed $1,000,000 to make improvements to an Italian fruit plantation and processing plant. If the interest rate is 6.00% per year, how much interest will they pay in the first year?

Current Multinational Challenges and the Global Economy

Corporate Ownership, Goals, and Governance

The International Monetary System

The Balance of Payments

The Continuing Global Financial Crisis

The Foreign Exchange Theory and Markets

International Parity Conditions

Foreign Currency Derivatives and Swaps

Foreign Exchange Rate Determination and Forecasting

Transaction Exposure

Translation Exposure

Operating Exposure

The Global Cost and Availability of Capital

Multinational Tax Management

International Portfolio Theory and Diversification

Foreign Direct Investment and Political Risk

Multinational Capital Budgeting and Cross-Border Acquisitions

Working Capital Management

International Trade Finance

Filters

In theory, the MNE should support debt ratios than a purely domestic firm because their cash flows are .

The number of foreign firms traded on the London exchange is than the number traded on the NYSE, and the costs of listing and disclosure in London are those for the NYSE.