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 International Business  Debt Finance
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Discussion Board Scenario: You work as an analyst in the planning unit of a firm with international operations. From time to time, you might be called to a meeting to discuss certain aspects of international business. As you state your responses to the Discussion Board questions, assume that you are in a formal, management discussion. Your manager has asked that you state your sources when citing facts or important concepts, for good order.

Question 2: Your company is contemplating a $100 million debt financing. The funds are needed to finance working capital requirements of your international company. This will technically be a short term loan, because the firm wants to repay it with interest in one year. Your manager asked you to attend a meeting on this topic because this is a fairly large amount. Your company's treasurer is considering three options:

1.     Borrowing U.S. dollars from the Bank of America at 5 percent.

2.     Borrowing British pounds from the Royal Bank of Scotland at 4 percent.

3.     Borrowing Euros from Deutsche Bank at 7 percent.

If your company borrows foreign currency, it will not cover it; that is, it will simply change foreign currency for dollars at today's spot rate and buy the same foreign currency a year later at the spot rate then in effect. You have read in a business journal that there are estimates that the pound may appreciate by 2 percent relative to the dollar and the Euro may depreciate by 3 percent relative to the dollar in the next year. From which bank should your borrow? Why?

 

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 Intenational Business  Debt Finance description 1 pages, Double Spacing

 

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$ 20.00
 International Business  Debt Finance
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  • Submitted On 06 Feb, 2019 01:27:13
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International Business Name Institution International Business Question 1 Ordering, in international business operations, is informed by various aspects that must all lead to the maximum benefits for the ordering business. Therefore, the ordering target identified by the business must generate the maximum benefits to the entity at minimal costs if the business is to remain in a financially viable position. As such, the sources must guarantee affordability such that business will no...
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