SEU International Finance Questions

Description

Question 1:Assume a Saudi Multinational Corporation decided to do a project in Germany one year ago (December 1st, 2021), which would be completed on November 30th, 2022. Suppose the project costs 100 million euros and is expected to generate income of 150 million euros on November 30th, 2022.The exchange rate at the beginning of the project is 0.23 Euro/SAR, and it is 0.27 Euro/SAR at the end of the project.There is no derivative bearing SAR currency, but there is a way for a Saudi firm to engage in the forward/options market.

Calculate the initial investment in SAR.
Show the choices for financing this project by the Saudi firm.Just show without calculation.
Calculate the profit from this investment in Euro and SAR also show whether the Saudi firm was hurt or benefited from changes in the exchange rate movement.
How would the Saudi firm hedge against the exchange rate risk?

Question 2: The US is considered a country that borrows at a lower cost of capital than the rest of the world; briefly explain why.

Question 3: According to Vision 2030, Saudi Arabia planned to diversify its production, and one of the production divisions is Small & Medium Enterprises (SME).The goal by 2030 is to make 35 percent of GDP from SMEs.Briefly explain whether Saudi Arabia can achieve this goal within this time frame and how the Saudi private equity market would attract foreign SMEs.You might do a little research about this.

Question 4: There are two theories related to where Foreign Direct Investment (FDI) would be invested; one of them is the behavioral approach, which is that firms first invest in closer countries considered synch.Explain how this would relate to Saudi firms invested in other countries.Do you think this theory applies to Saudi firms, or do they usually invest in western countries?

Question 5: If one of the Saudi banks (i.e., Al Bilad Bank) merges with another international bank (i.e., First Abu Dhabi Bank) to have a higher market share in the banking industry. Would you think a local firmàaction of merging with an international firm justifiable to increase its concentration on the industry globally? Discuss.

Explanation & Answer:

5 Questions

User generated content is uploaded by users for the purposes of learning and should be used following Studypool’s honor code & terms of service.



^{Have a similar assignment? "Place an order for your assignment and have exceptional work written by our team of experts, guaranteeing you A results."}

Our Service Charter

1. Professional & Expert Writers: Eminence Papers only hires the best. Our writers are specially selected and recruited, after which they undergo further training to perfect their skills for specialization purposes. Moreover, our writers are holders of masters and Ph.D. degrees. They have impressive academic records, besides being native English speakers.

2. Top Quality Papers: Our customers are always guaranteed of papers that exceed their expectations. All our writers have +5 years of experience. This implies that all papers are written by individuals who are experts in their fields. In addition, the quality team reviews all the papers before sending them to the customers.

3. Plagiarism-Free Papers: All papers provided by Eminence Papers are written from scratch. Appropriate referencing and citation of key information are followed. Plagiarism checkers are used by the Quality assurance team and our editors just to double-check that there are no instances of plagiarism.

4. Timely Delivery: Time wasted is equivalent to a failed dedication and commitment. Eminence Papers are known for the timely delivery of any pending customer orders. Customers are well informed of the progress of their papers to ensure they keep track of what the writer is providing before the final draft is sent for grading.

5. Affordable Prices: Our prices are fairly structured to fit in all groups. Any customer willing to place their assignments with us can do so at very affordable prices. In addition, our customers enjoy regular discounts and bonuses.

6. 24/7 Customer Support: At Eminence Papers, we have put in place a team of experts who answer all customer inquiries promptly. The best part is the ever-availability of the team. Customers can make inquiries anytime.