Question 3,4,5 and 13. Please

1. Access to Global Markets. What are reasons MNCs desire access to equity markets? Are there differences between the needs of U.S.-base Chapter 10 Long-Term Financing 273 Industry & leisure Questions anmunication ceuticals & mology I goods retailers I hardware & tailers uticals & gy etals ilers MNCs? desire access to global debt and rences between the needs of U.S.-based and foreign-based 2. MNCs vs. Domestic Firms. What are some of the advantages and constra in their financing activities? What are some of the advantages and constraints MNCs face 3. Bank Loans. What are the advantages and disadvantages of bank fina typical forms of bank financing, particularly for MNCS? vantages of bank financing? What are 4. Bank Loans for Acquisition. As part of its global strategy, Rio Basta, a Braz firm, purchased a Canadian minine firm for USD 3 billion. This transaction www the Brazilian firm's revenues by 40 nercent Discuss noss revenues by 40 percent. Discuss possible ways in which a bank can help finance this acquisition. 5. Eurobonds. What are the characteristics of Eurobond markets that are attractive to an MNC? What are alternatives for Eurobond issues for U.S. firms, European firms, and Asian firms? 6. FRNs. What are FRNS? Explain circumstances under which an FRN would be attractive to a Taiwanese MNC. 7. Reverse Floaters. What are reverse floaters? What are their typical terms? Speculate on the circumstances when a U.S.-based MNC would be interested in this instrument. 8. Embedded Options. Give two examples of how options can be embedded in a debt issue. Discuss costs and benefits in these examples to the issuer. 9. ICAPM. Discuss differences between the ICAPM and the DCAPM. What are some prac- tical difficulties in applying the DCAPM? 10. Cost of Equity. List several non-CAPM methods used to estimate the cost of equity. Explain why these methods may make sense for MNCs. 11. Agency Costs. Explain how a careful financing strategy can mitigate agency costs. Provis example. 12. Com Disk. Explain how a careful financing strategy can mitigate country risk. Prostexample. 13. Interest Rate Swap. The CFO of a small emerging markets-based MNC has just orga nized his firm's first foray in the Eurodebt markets. The issue was a fixed-rate medium- term note denominated in the USD. Recent developments, however, indicate that the US rvices omputer cers in the -ell as ilows DIB), wers -chnical hardware & Puran Bisacque choru Slace Sipment ks aral retailers naceuticals & chnology wy. Rio Basta, a Brazilian mining This transaction will increase arkets that are attractive to an os firms, European firms, and al metals retailers & - Services & Computer their typical terms? Speculate on and disadvantage of bank mancing! Wha mancing. particularly for MNCS! Loans for Acquisition. As firm, purchased a Canadian mining firm for USD 3 billion. This transac qosition. As part of its global strategy. Rio Basta, a Bra the Brazilian firm's revenues by 40 percent. Discuss possible way help finance this acquisition cent. Discuss possible ways in which a bunn 5. Eurobonds. What are the characteristics of Eurobond markets that are MNC? What are alternatives for Eurobond issues for U.S. firms. F Asian firms? or 6. FRNs. What are FRNs? Explain circu circumstances under which an FRN would be attrac to a Taiwanese MNC. 7. Reverse Floaters. What are reverse floaters? What are their typical terms the circumstances when a U.S.-based MNC would be interested in this is 8. Embedded Options. Give two examples of how options can be embed cu issue. Discuss costs and benefits in these examples to the issuer, onces between the ICAPM and the DCAPM. What are some pia tical difficulties in applying the DCAPM? 10. Cost of Equity. List several non-CAPM methods used to estimate the cost of Explain why these methods may make sense for MNCs. 11. Agency Costs. Explain how a careful financing strategy can mitigate agency co Provide an example. 12. Country Risk. Explain how a careful financing strategy can mitigate country Provide an example. 13. Interest Rate Swap. The CFO of a small emerging markets-based MNC has just orga nized his firm's first foray in the Eurodebt markets. The issue was a fixed-rate medium- term note denominated in the USD. Recent developments, however, indicate that the U.S. economy is slowing down and that rates are probably headed lower. You are a financial analyst reporting to the CFO. Your task is to explain how the firm can use interest rate swaps to exploit this particular market condition. Also note that the CFO may be leery of conducting an exotic transaction. What market data can you use to alleviate the CFO's ons can be embedded in a debt ducers in the well as allows QIB), ost concerns? 14. Currency Swaps. What are currency swaps? What are cash flows related to a currency swap contract? Explain how an MNC can enter into currency swaps to alter its currency exposure 15. Swap Mal5. What is the structure of swap markets? What types of firms have access to these interents? Are transaction costs high? What is the size of the typical transac- tion? Was benefits of using swap markets for the MNC? 16. Structure for