List and Explain Three Concepts Differentiating International from Domestic Financial

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The Answer is The authors identify six concepts of increased complexity for International Financial Management. First, each of the countries where MNE operates is unique in terms of its culture, history and institutions. This implies the necessity for the management to be inclusive of different business customs and practices. Second, MNE's corporate governance has to incorporate foreign countries regulations and different institutional practices and not limit itself to prevailing domestic legislation. Third and Forth, MNEs are exposed to additional foreign exchange and political risks due to existence of their foreign subsidiaries. Fifth, traditional approach to financial theories like capital budgeting and cost of capital has to reflect the increase of complexities arising from the international finance system. And sixth, the nature of the financial instruments utilized by the MNEs has to be adjusted according to the different risks of international operations.

List and Explain Three Concepts Differentiating International from Domestic Financial

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