公司财务讲义(英文版)

1CORPORATEFINANCELING-NANOUYANGPROFESSOROFFINANCEINSTITUTEOFCONTEMPORARYFINANCESHANGHAIJIAOTONGUNIVERSITY2ValuingInternationalCashFlowsM[E(Cj,t)×E(Ej,t)]Nj=1PV=t=1(1+r)tE(Cj,t)=expectedcashflowsdenominatedincurrencyjtobereceivedbyparentinperiodt.E(Ej,t)=expectedexchangerateatwhichcurrencyjcanbeconvertedtoRMBattheendofperiodt.r=weightedaveragecostofcapitalofparent.M=numberofcurrencies.N=numberofperiods.3RegressionModelandExpectation(1)Regression:measurerelationshipsbetweenvariableswhenestablishingpolicies.EXPt=b0+b1×USDt-1+b2×GNPt-1+∙∙∙+ut.EXPt=%changeinChinaexportstotheU.S..b0=aconstant.USD=%changeinthevalueofU.S.dollar.b1=regressioncoefficientmeasuring1%changeinUSDt-1willleadtox%changeinEXPt.GNP=%changeintheU.S.GNP.B2=regressioncoefficientmeasuring1%changeinGNPt-1willleadtox%changeinEXPt.ut=anerrorterm.4RegressionModelandExpectation(2)Ifb0=0.002,b1=0.08,b2=0.36,USD1-1=5%,GNP1-1=-1%,ifinsertthesefiguresintotheregressionmodel,EXP1=3.84%.ItmeansthatoneyearlaterChinaexportstotheU.S.willincrease3.84%.5EquilibriumSpotExchangeRateE(RMB/$1)SE0DQ0Qof$WhenDfor$=Sof$,Q0=theequilibriumquantityof$,E0=theequilibriumspotexchangerate.6PriceElasticityofDemandandFutureSpotExchangeRateE=(ΔQ/Q)/(ΔP/P).E=priceelasticityofdemand.Q=quantityofgoodsdemanded.P=price.ΔQ=changeinQdemandedforachangeinP(ΔP).IfE1,totalspendinggoesupwhenPdeclines.Efor$couldhaveanimpactonthefuturespotexchangerateof$andRMB.7BalanceofPaymentsandFutureSpotExchangeRate(1)Credits($inflows)Debits($outflows)a:Exportsofcivilianb:Importsofciviliangoodsgoodsc:Militarysalesd:MilitarypurchaseabroadabroadTradebalance=a+c-(b+d)8BalanceofPaymentsandFutureSpotExchangeRate(2)e:Exportsofservicef:Importsofservices(investmentincome(investmentincomeandfeesearned,paidout,Chinaforeigntourismintourismabroad,China,etc.)etc.)g:Netunilateraltransfers(gifts)Currentaccountbalance=a+c+e-(b+d+f+g)9BalanceofPaymentsandFutureSpotExchangeRate(3)h:Foreignprivatei:ChinaprivateinvestmentinChinainvestmentabroadj:Foreignofficialk:ChinesegovernmentlendinginChinalendingabroadCapitalaccountbalance=h+j-(i+k)l:NetincreaseinChinaofficialreservesOfficialreservesbalanceNote:Itemhincludesneterrorsandomissions.10BalanceofPaymentsandFutureSpotExchangeRate(4)IfChinahasatradesurplusagainsttheU.S.,thevalueofRMBwillbehigherthanthatof$,spotratewillchange.11InflationandFutureSpotExchangeRateE(RMB/$1)S’E1SE0D’DQ1Qof$IfIFinChinathatintheU.S.,supplyof$willmovefromStoS’becausetheChinesearelikelytodecreasetheirpurchasesofU.S.imports.Meanwhile,demandfor$willmovefromDtoD’becausetheAmericansarelikelytosubstituteChinaimportsforU.S.products.Thus,spotexchangeratewillmovefromE0toE1.12InterestRateandFutureSpotExchangeRateAllotherthingsbeingequal,wheninterestrateinChinaisgreaterthanthatintheU.S.,investorswillswitchfromdollartoRMBtotakeadvantageofthehigherRMBinterestrates.So,demandfor$andsupplyof$willchange,spotexchangeratewillchange.13NationalIncomeandFutureSpotExchangeRateAnincreaseinChinaincomewillleadtomoreChinaimportsfromtheU.S.asChinesepeoplespendsomeofincomeonU.S.products.This,however,wouldcausedemandfor$andsupplyof$tochangeandspotexchangeratetochange.14OtherFactorsAffectingFutureSpotExchangeRatePoliticalandeconomicenvironment:ifpoliticalandeconomicenvironmentinChinaisbetterthanthatintheU.S.,thevalueofRMBwillbehigherthanthatof$,spotratewillchange.Investments:ifAmericansinvestinChina,demandfor$andsupplyof$willchange,spotratewillchange.15DepreciationVersusAppreciationSupposethatonJuly19,2001,U.S.dollardevaluedby17%againstRMB.IfE0=initialRMBvalueofonedollarandE1=post-devaluationRMBvalueofonedollar,thenweknowthat(E1-E0)/E0=-17%.SolvingforE1intermsofE0yieldsE1=83%×E0.Thus,theappreciationofRMBagainstU.S.dollar=(E0-E1)/E1=(E0-83%×E0)/(83%×E0)=20.48%.16ReasonsforGovernmentInterventionReduceeconomicexposure–ariskincurredbyexchangeratefluctuations.Adjustimportsandexports.IfRMBappreciates,ChinawilllosecomparativeadvantageinpriceagainsttheU.S.,thusreduceexports.Eliminatetheimpactofexchangeratefluctuationsoninflationathome.17ApproachtoGovernmentInterventionE(RMB/$1)S’E1SE0D’DQ2Q1Q3Qof$TomaintainE0inthefaceofE1,eithertheAmericangovernmentortheChinesegovernmentorbothmustsell(Q3-Q2)dollarstopurchase[[(Q3-Q2)×E0]RMB,therebyeliminatingthedemandfor(Q3-Q2)dollars,andsimultaneouslyeliminatingtheexcesssupplyof[(Q3–Q2)×E0]RMB.18TermstoKeepExistingExchangeRateTerms=internationalreserve/balance-of-paymentsdeficit.19SpotQuotations(1)Directquotation:RMB/$1.Indirectquotation:$/1RMB.Bidquote:buyquote.Askquote:sellquote.20SpotQuotations(2)Assumeyouhave10000RMB.AlsoassumetheBankofChina’sbidratefor$1is8.4513RMBanditsaskrateis8.4536RMB.Ifyouconvert10000RMBinto$,youget10000/8.4536=$1182.93.Ifyoureconvertthe$1182.93backtoRMB,yougetonly1182.93×8.4513=9997.30(RMB).Thebid/askspread=10000-9997.30=2.7(RMB).Or,thebid/askspread=(8.4536-8.4513)/8.4536=0.03%.21ForwardQuotationsOutrightrate:actualrate.90-dayforwardbid=8.2142RMB/$1.Swaprate:aforwarddifferential=discountfrom,orapremiumon,spotrate.Ifspotrate=8.1023-3