Management and Finance for Multinational Companies Question 1
One of the key financing decisions faced by companies is to determine their capital structure. Multinational companies usually have more flexibility on
financing than purely domestic firms.
Undertake a review of the current literature to identify the key determinants of capital structure since the global financial crisis. (40 marks)
Management and Finance for Multinational Companies Question 2
The attached article from Reuters shows that as the global financial markets begin to recover there is increased interest in mergers, acquisitions
divestments and privatisations.
Critically evaluate the benefits and disadvantages of expansion via organic growth versus expansion via acquisition. Marks will be awarded for referencing
and using real life cases to illustrate your answer. (40 marks)
Companies often wish to hedge payments or receipts.
a) Clearly explain in your own words how a money market hedge and forward contract work and how they can be used to hedge a transaction. You should include a
consideration of their benefits, costs and limitations in your answer. In particular discuss the kinds of currency movements which can’t be hedged. (12
b) Give an example of a transaction that a company (Easy Jet) might hedge. You MUST make up your own example. Taking an example from a book is not
For your chosen example demonstrate the use of a forward contract and a money market hedge to hedge the transaction using real life data. (8 marks)
Management and Finance for Multinational Companies Required Information
You will find the information you need about exchange rates at the sites given below. You may find that you need to use cross rates to determine the exchange
rates you need.
Marks will be given for the correct use of bid/offer or ask rates and suitable interest rates. You should include screen shots showing clearly all the data
you have use