INTERNATIONAL BUSINESS FINANCE

International Business Finance



International Business Finance

Introduction

Numerous studies examine the relationship between international trade and economic growth, as well as between financial development and economic growth. The importance of trade and financial development in the growth literature provides motivation to study the relationship between the two. Many of the existing studies on this issue examine individually specific measures of financial development, e.g., private credit and foreign investment. The main issue that is usually checked is the financial development in a country that relates to the degree of bilateral trade with its trading partners. A gravity model is constructed and estimated with a fixed effects method. The model includes three variables commonly used in a gravity equation: distance between pair countries, land common border, and stage of development. Ease of access to loans and ease of access to the local equity market represent access to external funds. Three international financial indicators which are included for any topic are: country credit ratings, international capital market controls, and real exchange rates. Therefore, all the issues related to International Business Finance will be discussed in detail.

Evaluation of the Proposed Joint Venture

The evaluation of the proposed joint venture has clearly shown that is mentioned in the appendix of the report it is not going to be a favorable option for IFM Plc. The financial analysis stated the negative value of the net present value of the cash flows earned by the firm. It is not at all going to provide any benefit to IFM Plc even though, they will only be having a fifty percent of the share in the whole business. Even the non-financial analysis of the whole situation clearly shows that the company might not have a huge advantage by forming a joint venture because of the issues related to transactions based on the currency. Although, the mode of currency that will be used for all the trading transactions is going to be Euro but still the financing issue might cause problems for the company. There was a normal capital investment appraisal method used for the financial analysis of the data.

Operational and Strategic Challenges of IFM Plc

The operational and strategic challenge that is experienced by IFM Plc is related to the transactions that the company needs to perform in its overseas markets. There are numerous costs associated with the operational work of the IFM Plc. The nature of the business is even the major reason because of which they need to spend a huge amount of money on their sales transactions. IFM Plc is having large scale global operations in many parts of the European Region, that are turning out to be a crucial factor for the entire company. They will certainly have to look at these aspects in order to take measures on the costs that the company is experiencing at the moment. The operational and strategic challenges of any organization matters considerably especially when they operate at a global ...