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Article: Multinationals, hedging, and capital structure under exchange rate uncertainty
Title | Multinationals, hedging, and capital structure under exchange rate uncertainty |
---|---|
Authors | |
Keywords | Capital structure Exchange rate uncertainty Hedging Multinationals |
Issue Date | 2006 |
Publisher | Springer New York LLC. The Journal's web site is located at http://springerlink.metapress.com/openurl.asp?genre=journal&issn=0923-7992 |
Citation | Open Economies Review, 2006, v. 17 n. 1, p. 103-114 How to Cite? |
Abstract | This paper examines the interplay of the financing and hedging decisions of a risk-averse multinational firm having a wholly-owned foreign subsidiary. Exchange rate risk management of the multinational firm is shown to have direct impacts on its international capital structure decision and on its currency of denomination decision. If a currency forward market exists, the multinational firm will devise its international capital structure so as to minimize the global weighted average cost of capital. Or else the multinational firm has to rely on a money market hedge through issuing more foreign currency denominated debt and less domestic currency denominated debt, thereby resulting in a higher global weighted average cost of capital. © Springer Science + Business Media, Inc. 2006. |
Persistent Identifier | http://hdl.handle.net/10722/85640 |
ISSN | 2023 Impact Factor: 1.5 2023 SCImago Journal Rankings: 0.478 |
ISI Accession Number ID | |
References |
DC Field | Value | Language |
---|---|---|
dc.contributor.author | Broll, U | en_HK |
dc.contributor.author | Wong, KP | en_HK |
dc.date.accessioned | 2010-09-06T09:07:29Z | - |
dc.date.available | 2010-09-06T09:07:29Z | - |
dc.date.issued | 2006 | en_HK |
dc.identifier.citation | Open Economies Review, 2006, v. 17 n. 1, p. 103-114 | en_HK |
dc.identifier.issn | 0923-7992 | en_HK |
dc.identifier.uri | http://hdl.handle.net/10722/85640 | - |
dc.description.abstract | This paper examines the interplay of the financing and hedging decisions of a risk-averse multinational firm having a wholly-owned foreign subsidiary. Exchange rate risk management of the multinational firm is shown to have direct impacts on its international capital structure decision and on its currency of denomination decision. If a currency forward market exists, the multinational firm will devise its international capital structure so as to minimize the global weighted average cost of capital. Or else the multinational firm has to rely on a money market hedge through issuing more foreign currency denominated debt and less domestic currency denominated debt, thereby resulting in a higher global weighted average cost of capital. © Springer Science + Business Media, Inc. 2006. | en_HK |
dc.language | eng | en_HK |
dc.publisher | Springer New York LLC. The Journal's web site is located at http://springerlink.metapress.com/openurl.asp?genre=journal&issn=0923-7992 | en_HK |
dc.relation.ispartof | Open Economies Review | en_HK |
dc.rights | The original publication is available at www.springerlink.com | - |
dc.subject | Capital structure | en_HK |
dc.subject | Exchange rate uncertainty | en_HK |
dc.subject | Hedging | en_HK |
dc.subject | Multinationals | en_HK |
dc.title | Multinationals, hedging, and capital structure under exchange rate uncertainty | en_HK |
dc.type | Article | en_HK |
dc.identifier.openurl | http://library.hku.hk:4550/resserv?sid=HKU:IR&issn=0923-7992&volume=17&spage=103&epage=114&date=2006&atitle=Multinationals,+Hedging,+and+Capital+Structure+under+Exchange+Rate+Uncertainty | en_HK |
dc.identifier.email | Wong, KP: kpwongc@hkucc.hku.hk | en_HK |
dc.identifier.authority | Wong, KP=rp01112 | en_HK |
dc.description.nature | postprint | - |
dc.identifier.doi | 10.1007/s11079-006-4744-x | en_HK |
dc.identifier.scopus | eid_2-s2.0-32044435846 | en_HK |
dc.identifier.hkuros | 123405 | en_HK |
dc.relation.references | http://www.scopus.com/mlt/select.url?eid=2-s2.0-32044435846&selection=ref&src=s&origin=recordpage | en_HK |
dc.identifier.volume | 17 | en_HK |
dc.identifier.issue | 1 | en_HK |
dc.identifier.spage | 103 | en_HK |
dc.identifier.epage | 114 | en_HK |
dc.identifier.isi | WOS:000235062800005 | - |
dc.publisher.place | United States | en_HK |
dc.identifier.scopusauthorid | Broll, U=7004024398 | en_HK |
dc.identifier.scopusauthorid | Wong, KP=7404759417 | en_HK |
dc.identifier.citeulike | 495444 | - |
dc.identifier.issnl | 0923-7992 | - |