13 research outputs found
Outward Foreign Direct Investment from India: Recent Trends, Government Policies and Theoretical Explanation
Forecasting quarterly movements of the lira/pound-sterling exchange rate: Random walks, drift, seasonality and variable parameters
The growth of multinational banking, the Euro‐currency market and their effects on developing countries
Multinationals, Hedging, and Capital Structure under Exchange Rate Uncertainty
This paper examines the interplay of the financing and hedging decisions of a risk-averse multinational firm having a wholly-owned foreign subsidiary. Exchange rate risk management of the multinational firm is shown to have direct impacts on its international capital structure decision and on its currency of denomination decision. If a currency forward market exists, the multinational firm will devise its international capital structure so as to minimize the global weighted average cost of capital. Or else the multinational firm has to rely on a money market hedge through issuing more foreign currency denominated debt and less domestic currency denominated debt, thereby resulting in a higher global weighted average cost of capital. Copyright Springer Science + Business Media, Inc. 2006multinationals, hedging, capital structure, exchange rate uncertainty,