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Financial Management

7. Give an example of one of the five constraints on international finance, the country it might happen in, and how you would recommend a multinational corporation should address this constraint.

8. Benz purchased Chrysler many years ago. How has this benefited both companies? Do you think that this will happen to GM? Why?

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The response addresses the queries posted in 525 Words, APA References


In the globalize scenario, companies need to be globally competitive in order to survive. Knowledge and understanding of different countries economies and their markets is must for establishing oneself as global player. Proper knowledge about international finance helps a finance manager to understand the complexities of the various economies because various events affect the operations of the business firm. The five constraints on international finance are sovereign immunity, financial market structure, liberalization of regulations governing the international financial market, foreign exchange risk and government restrictions (Steil, 2008).

Example of Government restrictions: A government restriction is the major constraints on international finance. It imposes various extent of debt financing in infrastructure projects. In the United States, maximum debt equity ratio is based on the ...

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The response addresses the queries posted in 525 Words, APA References