Reference no: EM133675018

Paper Assignment

Analysis of international financing of multinational corporations and Discussion of the financial/business environment for this MNC face, how it was affected.

Choose an MNC (Multinational Corporation) that has undergone international stock market financing or international public debt market financing in the past 5 years, conduct a comprehensive analysis of the decision-making rationale, and provide an in-depth discussion about the related financial/business environment.

The MNC TOPIC: Google

Google Stock Finance

PS.

I. MNC stands for Multinational Corporation. It refers to a company that operates in multiple countries, typically having a centralized management structure in one country (often its country of origin) while conducting business operations in several others. MNCs are characterized by their global presence, with subsidiaries, branches, or affiliates in different parts of the world. They often engage in various activities such as manufacturing, marketing, sales, and distribution on an international scale.

II. International stock market financing refers to the process by which companies raise capital by selling shares of their stock on stock exchanges located in different countries. This type of financing allows companies to access a broader pool of investors and capital from various parts of the world.

Template (Must include in this paper)

I. Company Overview

Introduction of Google and must include which countries are Google cross-in.

II. International financing Decision making of Google

A. At least 3-5 events. Occurred within the past 5 years.

B. Briefly describe the content of the event (causes, consequences, and impact)

III. Analysis Decision-Making Rationale for International Financing:

A. Provide the basis/role/benefits/impact based on the above financing decisions

B. Examples (Expand it according to the actual situation):

1. Access to Capital Markets: Google might opt for international financing to access capital markets in regions where there is a strong investor base or where interest rates are more favorable.

2. Currency Diversification: By issuing debt or equity internationally, Google can diversify its exposure to different currencies, reducing foreign exchange risk.

3. Strategic Expansion: Financing activities could be driven by Google's strategic objectives, such as funding expansion into new markets, research and development, or acquisitions.

4. Cost of Capital Optimization: Google might seek international financing to optimize its cost of capital by tapping into markets with lower interest rates or more favorable investor sentiment.

5. Capital Structure Management: Issuing debt or equity internationally allows Google to manage its capital structure efficiently, balancing debt and equity to maximize shareholder value.

In this section, analyze and write based on the following concepts:

1. Time value of money; Foreign bond; Yield to maturity
2. Futures; Options; Hedge in Finance
3. Functions of money; Monetary policy; Floating exchange rate.
4. Capital budgeting; Net present value; CAPM (capital asset pricing model)

IV. In-depth discussion about the related financial/business environment for Google

A. Analyze the international financial market factors that Google needs to consider when making the above-mentioned international financing decisions.

B. The country's financial environment and economic environment (for example: Google is financing in France and needs to consider France's financial and economic environment)

C. The situation faced by the industry in the country (for example: when Google raises funds in France, it needs to consider whether the international market and France are friendly to Google's industry business).

D. Other examples(Expand it according to the actual situation):

1. Global Economic Conditions: Google's financing decisions are influenced by global economic conditions, including GDP growth, interest rates, inflation, and geopolitical stability.

2. Regulatory Environment: Google must navigate diverse regulatory frameworks in different countries when conducting international financing activities, ensuring compliance with securities laws and exchange regulations.

3. Investor Sentiment and Demand: Google assesses investor sentiment and demand in international markets to determine the timing and structure of its financing transactions, aiming to achieve optimal terms.

4. Competitive Landscape: Google operates in a highly competitive industry, facing rivals like Samsung, Google, and Huawei. Its financing decisions may be influenced by competitive pressures and the need to maintain technological leadership.

5. Tax Considerations: Google's international financing activities are also shaped by tax considerations, including tax rates, incentives, and repatriation policies, as seen in its past use of offshore cash holdings for financing and tax optimization purposes.

6. Risk Management: Google employs various risk management strategies to mitigate financial risks associated with international financing, including currency hedging, interest rate swaps, and diversification of funding sources.

7. Investor Relations and Transparency: Google maintains strong investor relations and transparency to build trust with shareholders and debt holders, providing clear communication about its financial strategy, performance, and use of proceeds from international financing activities.

In this section, analyze and write based on the following concepts:

1. Impossible Trinity, GDP & Inflation rate Economy Recession, Import and export & currency floating exchange rates

V. Conclusion

VI. References