international financial management Two 2 pages Essay
Each paper 2 pages, double spaced
Essay 1: What are the key considerations that a CFO has to take into account in constructing his company’s capital structure?
(good to mention debt, equity, cost of debt, cost of capital, WACC, leverage, ROI, etc)
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Essay 2: What are the relative merit of the following ways to hedge FX risk: options, forward contracts and money market hedges?
Be specific, avoid being too general
Just trying to be specific to explain a case. Don’t be too general.
fx risk is foreign exchange risk
Answer preview
thus considers the weighted average cost of capital (WACC), tax implications, marginal costs, bankruptcy threat to increase the value of an investment.
Analysis of key considerations
First, the CFO often seeks to have a lower weighted cost of capital (WACC) for an advantage in the capital market when seeking recourse (Soni, 2015, February 18). The WACC represent the discount rate useful for calculation of the net present value of the company and is explained in the equations below.
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