Overview: For this first milestone, due in Module Seven, you will complete Section 3: Global Expansion Financing, which will outline how you will secure funding for the corporation you have chosen for your final project. This section will include information about available local financing, parent company contribution, and any additional financing the company will use for its global expansion. Prompt: First, review the annual financial statements (Form 10-K) for your selected company. You can either retrieve the statements from the webpage SEC EDGAR Company Filings or directly from the company’s website, often listed under “Investor Information.” Second, review the Module Seven resources, which provide helpful links to financing information. Finally, complete the Final Project Milestone Three section in the Final Project Template. The paper should outline the current capital structure for the selected parent company and the funding details for the new foreign subsidiary. You will need to research the potential sources of funding and determine how best to finance the expansion. Be sure to analyze the capital structure of the new company for debt financing, stock issue financing, or using retained earnings from the parent company. Specifically, the following critical elements must be addressed: • Section 3: Global Expansion Financing A. Analyze the current capital structure of the parent company. This should be done using the current annual statements. B. Determine the funding your corporation should secure for this expansion into a global market. For example, you need to determine if the company will finance its expansion by using debt, issuing new stock, or using retained earnings of its expansion. Look at the current capital structure and use it as a guide for the subsidiary structure. C. Analyze the financing of the new expansion. Consider financial requirements and how foreign currency will be acquired. Since the company will need to have foreign currency (currency of the country it is expanding into) on hand from day one of the company operations, determine how it will obtain the foreign currency. What are the options of local financing—including any regulations on local currency reserves? Be sure to refer to the Module Seven resources, additional course materials, and your own research to support your responses. Incorporate instructor feedback on this milestone into your final project, the global expansion proposal. Rubric: Guidelines for Submission: This milestone should be submitted as a Word document, 2–3 pages in length, double-spaced, using 12-point Times New Roman font, one-inch margins, and the latest edition of the APA manual for formatting and citations. Critical Elements Section 3: Capital Structure Section 3: Funding Section 3: Financing Proficient (100%) Analyzes the current capital structure of Needs Improvement (70%) Analyzes the current capital structure of Not Evident (0%) Does not analyze the current capital the parent company structure of the parent company Determines the funding the corporation the parent company, but analysis is cursory or lacks important details Determines the funding the corporation should secure for this expansion into a should secure for this expansion into a corporation should secure for this global market global market, but response is cursory or lacks important details Analyzes the financing of the new expansion into a global market expansion Submission has no major errors related to expansion, but analysis is cursory or lacks important details Submission has major errors related to Submission has critical errors related to citations, grammar, spelling, syntax, or citations, grammar, spelling, syntax, or citations, grammar, spelling, syntax, or organization organization that negatively impact organization that prevent understanding readability and articulation of main ideas of ideas Analyzes the financing of the new expansion Articulation of Response Value 30 30 Does not determine the funding the Does not analyze the financing of the new Total 30 10 100% Global Expansion Proposal INT 620 Final Project 1 Contents Final Project Milestone One (Module Three) .................................................................................. 3 Introduction: Company Proposal and Background...................................................................... 3 Introduction: Subsidiary Expansion ............................................................................................ 3 Broad Strokes of the Expansion Plan: Microeconomic and Macroeconomic Factors in Domestic Market ......................................................................................................................... 3 Broad Strokes of the Expansion Plan: Microeconomic and Macroeconomic Factors in Prospective Global Market .......................................................................................................... 3 Broad Strokes of the Expansion Plan: Exchange Rate Regime in Domestic and Prospective Global Markets ............................................................................................................................ 4 Broad Strokes of the Expansion Plan: Impacts of Economic Factors on Exchange Rates .......... 5 Broad Strokes of the Expansion Plan: Financial Impacts of Exchange Rate Movements on a Corporation .................................................................................................................................. 5 Broad Strokes of the Expansion Plan: Main Risks and Main Benefits of the Proposed Expansion .................................................................................................................................... 6 Final Project Milestone Two (Module Five) ................................................................................... 7 Risk Mitigation Strategies: Current Financial and Strategic Impacts of International Risks ...... 7 Risk Mitigation Strategies: Mitigating Foreign Exchange Rate Risk and Justifying Tools ........ 7 Risk Mitigation Strategies: Analyze Financial Impacts of Foreign Exchange Risks to Inform Risk Mitigation Strategies ........................................................................................................... 7 Risk Mitigation Strategies: Future Mitigation Strategies Based on Prospective Market ............ 7 Final Project Milestone Three (Module Seven)............................................................................... 8 Global Expansion Financing: Capital Structure .......................................................................... 8 Global Expansion Financing: Funding ........................................................................................ 8 Global Expansion Financing: Financing ..................................................................................... 8 Final Project Submission (Module Nine) ........................................................................................ 9 Repatriation of Funds .................................................................................................................. 9 Executive Summary ..................................................................................................................... 9 References...................................................................................................................................... 10 Appendix........................................................................................................................................ 11 INT 620 Final Project 2 Note: Throughout this template, the items that are enclosed in angle brackets have been provided to guide your responses. In your submissions, please delete these items. Remember to update the title page and the footer. Final Project Milestone One (Module Three) Introduction: Company Proposal and Background Introduction: Subsidiary Expansion Broad Strokes of the Expansion Plan: Microeconomic and Macroeconomic Factors in Domestic Market Broad Strokes of the Expansion Plan: Microeconomic and Macroeconomic Factors in Prospective Global Market INT 620 Final Project 3 Macroeconomics Microeconomics Big picture: Macroeconomics is concerned Little picture: Microeconomics is concerned with how the overall economy works. The with how supply and demand interact in government is a major object of analysis in individual markets for goods and services. macroeconomics. The foundation of macroeconomics is Microeconomics consists of individual entities, microeconomics, for example, how all markets for example, whether price rises in the interact to generate big phenomena that automobile or oil industries are driven by economists call aggregate variables. supply or demand changes. Output and income (GDP), unemployment, Preference relations, supply and demand, inflation and deflation. opportunity cost. Used to determine an economy’s overall Used to determine methods of improvement for health, standard of living, and needs for individual business entities. improvement. Reference: http://www.imf.org/external/pubs/ft/fandd/basics/bigsmall.htm Broad Strokes of the Expansion Plan: Exchange Rate Regime in Domestic and Prospective Global Markets INT 620 Final Project 4 Broad Strokes of the Expansion Plan: Impacts of Economic Factors on Exchange Rates Broad Strokes of the Expansion Plan: Financial Impacts of Exchange Rate Movements on a Corporation INT 620 Final Project 5 Broad Strokes of the Expansion Plan: Main Risks and Main Benefits of the Proposed Expansion INT 620 Final Project 6 Final Project Milestone Two (Module Five) Risk Mitigation Strategies: Current Financial and Strategic Impacts of International Risks Risk Mitigation Strategies: Mitigating Foreign Exchange Rate Risk and Justifying Tools Risk Mitigation Strategies: Analyze Financial Impacts of Foreign Exchange Risks to Inform Risk Mitigation Strategies Risk Mitigation Strategies: Future Mitigation Strategies Based on Prospective Market INT 620 Final Project 7 Final Project Milestone Three (Module Seven) Global Expansion Financing: Capital Structure Global Expansion Financing: Funding Global Expansion Financing: Financing INT 620 Final Project 8 Final Project Submission (Module Nine) Repatriation of Funds Executive Summary INT 620 Final Project 9 References INT 620 Final Project 10 Appendix INT 620 Final Project 11
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