BUSF_A01.qxd

Chapter 14 • Corporate restructuring ‘Mezzanine’ finance has also been a feature of a number of management buy-outs. This is bas ...

Summary business. The reasons for doing this might include a desire to give the spun-off busi- ness its own distinct corporate i ...

Chapter 14 • Corporate restructuring lManagement buy-outs (MBOs): lMBO =the sale of part of a business to a group of staff. lOft ...

Problems (Problems 14.1 and 14.2 are basic-level problems, whereas problems 14.3 and 14.4 are more advanced and may contain some ...

Chapter 14 • Corporate restructuring Balance sheet as at the end of the year just ended Thruster plc Relaxation plc £m £m Non-cu ...

Problems Observers believe that, following the takeover, the P/E ratio of Expansion plc will be 20. It seems likely that Expansi ...

15.1 Introduction A striking feature of many modern businesses is the extent to which they are inter- national in one or more as ...

Introduction l its ordinary shares are listed on the New York Stock Exchange as well as the UK one, which implies that foreign i ...

Chapter 15 • International aspects of business finance not affect foreign markets. We shall pick up the arguments about risk and ...

15.2 Foreign exchange It is probably true for many businesses, and for an increasing number of them, both large and small, that ...

Chapter 15 • International aspects of business finance ‘ currency). The word ‘normally’ is used in the preceding sentences becau ...

Foreign exchange demand, determines the rate. Relative supply and demand is caused, in turn, by the extent to which individuals, ...

Chapter 15 • International aspects of business finance Some theoretical explanations of relative exchange rates Various attempts ...

Foreign exchange Purchasing power parity(PPP) can be summarised as follows: = (15.1) where e 0 is the value in terms of the home ...

Chapter 15 • International aspects of business finance If real interest rates are equal in all countries, then: = where rnhis th ...

Foreign exchange Interest rate paritycan be summarised, in this context, as saying that where nom- inal interest rates differ fr ...

Chapter 15 • International aspects of business finance abnormal gains by trading in currencies. The same general factors seem to ...

Problems of internationalisation Transaction risk Suppose that a business buys something from a US supplier, which is priced in ...

Chapter 15 • International aspects of business finance home currency may deny the business the opportunity to buy from certain f ...

Problems of internationalisation One problem with using the forward market to solve the transaction risk problem is that the bus ...