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CHAPTER 17
MUTINATIONAL FINANCIAL MANAGEMENT

FOREIGN EXCHANGE MARKET

(PASAR VALUTA ASING)
Pengertian :
Pasar : Interaksi demand dan supply.
Valuta Asing : Mata uang asing.
PASAR VALUTA ASING :

Pasar yang berupa jaringan komunikasi yang dihubungkan dengan telepon, fax,
internet antar Dealer, Broker, Bank , melakukan transaksi tukar menukar mata
uang asing.

PELAKU PASAR
1. Commercial Bank
2. Foreign exchange Broker in the Interbank Market.
3. Commercial Costumers
4. Primarily Multinational Corporations
5. Central Banks

Luas Pasar seluruh dunia.

Sistem Perdagangan :

1.Spot Market : beli saat ini penyerahan uang saat ini juga

2Forward Market : Beli saat ini penyerahan uang dikemudian

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hari menurut perjanjian.
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The spot rate.

Pasar Valuta asing yang transaksi dan delivery terjadi pada saat yang
sama
Terdiri dari :
1.Spot Quota.
Uang memiliki nilai yang sama antar negara.
Contoh :
a.USA dan Inggris.
Di USA 1P = $5
Di Inggris = $1 = 0,2 P
b.Di Indonesia dan USA
Di Indonesia $1 = Rp.14.000,-
Di USA Rp.1 = 0.00007143
2.Transaction Cost.
Bank : memiliki Kurs Jual ( Ask) dan Kurs beli (Bid).
Selisih Kurs Jual dan Kur beli = Spread.
Ask price (Hg Jual) – Bid price (Hg. Beli)
% Spread = ----------------------------------------------------- x 100%
Ask price (hg jual)

Rupiah dengan $ US.

Bank menjual 1$ = Rp.14.000,- dan membeli 1$ = Rp.13.650,-
Spreadnya = 2,5%.
3.Cross Rate.
Rates melalui mata uang asing lainnya sebagai perantara.
Misal : Rp dengan $ USA dengan perntara Y Jepang.
$ 1 = Rp. 14.000,- kemudian $ 1 = Y. 200.
Berarti Y.1 = Rp.70,-

4.Currency Arbitrage.
Kurs ditentukan berdasar perjanjian untuk kurun waktu tertentu.
Contoh perjanjian :
Di New York P 1 = $ 1.9809
Di Jerman DM 1 = $ 0.6251
Di London P 1 = DM. 3.1650
Transaksi yang dapat dilakukan ( mencari Currency gain):
1.Dengan dana $.1000.000, ditukar DM di Jerman.
Diperoleh : 1/0.6251 x 1.000.000 = DM.1,559,744.04
2.DM dijual di London menjadi Pounsterling.
Diperoleh = 1/3.1650 x 1,599,744.04 = P.505,448.355
3.Pounterling di Jual di New York menjadi $ USA.
Diperoleh = 1.9809/1 x 505,448.355 = $.1.001.242,606

Jadi diperoleh Currency gain = $.1.001,242.606 – $.1.000.000

= $.1,242.606.

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The Forward Market.

 Transaksi sekarang delivery kemudian
 Dapat dilakukan untuk valas dan barang/product.
 Harga sudah disepakati pada saat transaksi.
Ilustrasi dari The Forward Market :
Perusahaan di USA import textil dari Inggris senilai P.1.000,000 dan diberi
kesempatan untuk membayar dalam 90 hari (3bl) setelah kesepakatan.
Saat ini P.1 = $ 1.71 dan importir dapat kontrak dengan Bank untuk
membayar 3 bulan yad. P.1= $1.72.
Apa yang terjadi ?
Jika 3 bulan yad. Ternyata P.1 = $1.75, maka Importir untung atas kontrak
sebesar = 1.000.000 ( 1.75 – 1.72) = $.30.000
Jika 3 bulan yad. Ternyata P.1= $1.70, maka importir mengalami kerugian
sebesar = 1.000.000 ( 1.70 – 1.72) = $.20.000.
Jadi atas kontrak ada yang kemungkinan diuntungkan dan ada yang
dirugikan--> disinilah mengandung unsur ketidakpastian (gharar).
Perbedaan antara :
Forward rate > dengan actual = premium
Forward rate > dengan actual = discount
Selisih antara SPOT RATE dengan FORWARD RATE = Cerminan perbedaan tingkat
bunga dari 2 negara , disebut INTEREST PARITY ( IP )

INTEREST RATE PARITY THEORY.

Isi Theory :

Negara yang memiliki tingkat bunga rendah premiumnya

tinggi, dan negara yang memiliki tingkat bunga tinggi
premiumnya rendah.
Forward rate :

Fi= Foreward rate untuk

Fi = ei penyerahan dari 1unit barang
dengan mata uang asing pada
waktu i.
ei = perkiraan nilai mata uang
asing dibanding mata uang
luar negeri pada waktu i.
Daftar Forward dikelurkan oleh ; BANK, BROKERS, DEALER, yang
berdagang VALAS.

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INTEREST RATE PARITY.

Rumusnya :
rh = tingkat bunga di negara
1 – rh fi
tertentu
------- = --------
rf = tingkat bunga di
1 – rf eo
luar negeri yg forward.
Fi = nilai forward
eo = nilai sekarang mata uang.
Ilustrasi :
Orang Indonesia memiliki Uang Rp.1.000.000,- jika diinvestasikan di
Indonesia mendapat interest 12%/th atau 4%/3bl.
Jadi dalam 3 bulan = 104% x Rp.1000.000,- = Rp.1.040.000,-

Jika diinvestasikan di Jepang :

Rupiah ditukar dengan Ye menggunakan spot rate baru dikirim ke Jepang.
Spot rate ---> Rp.100,- = Y.1 atau Rp.1 = Y 0,01
Hasil penukaran tersebut mendapat Y.10.000.
Tingkat bunga di Jepang 8%/th atau 2%/3bulan.
Setelah 3 bulan menjadi =
102% x Y.10.000 = Y.10.200.
Kurs Forward =
Y.10.200
--------------- = Y.0.0098
Rp.1.040.000,-

Disebut
parity
Perbedaan antara Rp. 1 = Y.0.01
Rp. 1 = Y.0.0098 cerminan perbedaan
interest.
Jika tidak parity =
Dapat terjadi flow in = premium
Dapat terjadi flow out = discount.

Rumus Parity =

( 1 + iY ) S
( 1 + i Rp.) = ----------------------------
F

F = Forward rate pada parity

F = (1.02) 0.01 / 1.04 = Y.0.0098
Rupiah Rp.1 = Y.0.01 tetapi Parity = Y.0.0098 (Discount)
Yen, Y.1 = Rp.100, tetapi Parity Y.1 = Rp.98,- ( Premium).

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PARITY CONDITION DALAM INTERNATIONAL FINANCE

DAN CURRENCY FORECASTING.

1.PURCHASING POWER PARITY (ppp)

Hubungan perbedaan inflasi di negara kita dengan negara lain.
a.Absolut Version = mata uang satu negara akan mempunyai nilai
yang sama disemua tempat.
Inflasi + x%, maka kurs turun – x%
Produk A di Indonesia harga Rp.14.000,- di USA $.1 ( $.1= 14.000)
Harga naik 10% menjadi 15.400, maka di USA terjadi depresiasi
karena tetap harganya $.1. Sehingga $1 = 15.400 (depresiasi).
b.Relative version.
Adjusment kurs akan setinggi perubahan inflasi kedua negara.
Inflasi Indonesia 10% dan USA 5%, maka Kurs akan turun 10%-
5%=5%

Rumus =
ei ( 1 + ih )

------- = ------------------

eo ( 1 + if )

2.fisher effect (FE).

Hubungan tingkat bunga dengan tingkat inflasi.
Tingkat bunga naik, inflasi juga naik.
Nominal Interest dipengaruhi 2 komponen;
1.A REAL REQUIRED RATE OF RETURN
2.INFLATION PREMIUM

Dirumuskan ==> 1+ nominal rate = (1+real rate)(1+expected inflation rate )

3.the international fisher effect (iff).

Hubungan tingkat bunga dan Kurs.
Tingkat bunga naik ==> inflasi naik ==> Kurs terdepresiasi

4.interest rate parity (irp)

Hubungan interest dengan forward ( premium / discount ).

Interest naik ==> Kurs forward semakin turun

5.Unbiased predection of future spot rate as forward rate (ufr).

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Hubungan Kurs sekarang dengan Kurs forward.

Kurs sekarang turun ====> forward juga turun.

Mini Case 6.
Citrus Products Inc. is a medium-sized producer of citrus juice drinks with groves in Indian River
County, Florida. Until now, the company has confined its operations and sales to the United
States, but its CEO, George Gaynor, wants to expand into Europe. The first step would be to set
up sales subsidiaries in Spain and Sweden, then to set up a production plant in Spain, and finally to
distribute the product throughout the European common market. The firm’s financial manager,
Ruth Schmidt, is enthusiastic about the plan, but she is worried about the implications of the
foreign expansion on the firm’s financial management process. She has asked you, the firm’s
most recently hired financial analyst, to develop a 1-hour tutorial package that explains the basics
of multinational financial management. The tutorial will be presented at the next board of directors’
meeting. To get you started, Schmidt has supplied you with the following list of questions.
a. What is a multinational corporation? Why do firms expand into other countries?
b. What are the six major factors that distinguish multinational financial management from financial
management as practiced by a purely domestic firm?
c. Consider the following illustrative exchange rates.
U.S. Dollars Required to Buy
1 Unit of Foreign Currency
Euro 1.2500
Swedish krona 0.1481
(1) Are these currency prices direct quotations or indirect quotations?
(2) Calculate the indirect quotations for euros and kronor (the plural of krona is
kronor).
(3) What is a cross rate? Calculate the two cross rates between euros and kronor.
(4) Assume Citrus Products can produce a liter of orange juice and ship it to
Spain for $1.75. If the firm wants a 50% markup on the product, what should
the orange juice sell for in Spain?

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MANAJEMEN WORKING CAPITAL pada MNC.

Sumber Dana.

Sumber dana untuk MNC

1.Bank Loans ( Pinjaman Bank)

Effektive Annual Interest Paid

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Fund received
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2.Commercial paper.
Surat berharga yang dikeluarkan oleh Bank untuk
mendanai bisnis.
Cost of capital yang dikeluarkan :
1.back up line’s of credit
2.fees to commercial bank
3.rating service fees.
3.Inter Company Loan & Back to back loan.
Inter company loan = utang antar perusahaan.
Int. Comp. loan
Parent Company Subsidiary Company

Back to back loan :

Inter Company loan
Parent firm of Subsidiary in
Country A Country B
deposit
back to back loan
Bank in Country A

Cost of capital dari back to back loan =

Interest cost interest income interest cost tax gain on

to parent + to parent + to subsidiary +/_ exchange loan

Contoh : Opportunity cost di negara induk 10%, tax
negara induk 34% dan di Negara cabang 40%
( selisihnya 6%). Pendapatan deposit induk 8%,
bunga bank 9% ( mata uang asing), devaluasi mata
uang asing 11% selama masa pinjaman
COC yang dibayar =
0,1(1-t) – 0,08(1-t) +0,09(1-t) – t ( cost exchange rate)=
0,1(0,66) – 0,08(0,66) + 0,09(0,6) – 0,4(0,11) = 2,08%

4. Paralel loan.
USA Japan

USA parent Japan parent

Direct loan in dollar Direct loan in yen

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Japan firm USA USA firm Japan

Subs. Subsidiary

Biaya kapital = sama dengan inter company loan & Back to back
loan.

The cost of capital

For foreign investment.

1.The Cost of Equity Capital ( COEC)

COEC saham nilainya diambil dari return yang diinginkan investor

di pasar modal.

Rumus dalam pendekatan CAPM : W Sharpe 1964.

ri = rf +  ( rm – rf)

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ri = merupakan return yang diinginkan investor dan dipergunakan

sebagai cost of capital.

Dalam pendekatan harga saham (nilai instrinsik)

 Jika Dividen tetap.

P0 = D0/ri ri = D0/P0

 Jika Dividen tumbuh stabil

Po = D1/ ri-g ri = Div.1/P0 + g

2.The Cost of Debt Capital ( CODC)

Total Cost Of Debt

i = ___________________
Dana riil yang diterima

3.Rata-rata tertimbang COC ( WACOC).

Jika COEC = ke
Jika CODC = id maka CODC ini perlu lebih dahulu di
adjustment menjadi biaya capital sesudah pajak sehingga
sama dengan sumber dana dari equity.

Setelah di adjustment menjadi :

id ( 1-t )

Besarnya WACOC di parent Company menjadi :

k0 = ( 1 – L )ke + L.id ( 1-t )

L = the parent debt ratio.

k0= sebagai discount rate

Contoh :
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Perusahaan MNC mendanai investasinya 60% modal

sendiri dengan COEC 20%, kemudian 30%nya utang
dengan CODC 6% dan 10%nya dari preferred stock
dengan COEC 14%.
Berapa WACOC sebagai discount rate ?

Jika CODC sudah diadjustment:

k0 = ( 0,6 x 20% ) + (0,3 x 6%)(1-t) + ( 0,1 x 14% ) = 15,2 %

Jika CODC belum diadjust dan tax 20% berapa k0 ?

Ko =12% + (1,8% x 0.8) +1,4%= 12% +1,44%+1,4%
=14,84%

4. Cost of Capital berdasar sumber dana MNC.

Fund Investment =

P ( Parent Company Fund) + Ef ( Return Earning the Subsidiary) +

Df ( Foreign Debt )

 Parent after tax of debt = id (1-t)

 Equity = ke
 The subsidiary cost of capital equal = ks
 After tax cost of foreign bedt = if
WACOC =
ki = k0 – a (ke – ks ) – b { id (1-t) – if }
a = Ef/I

b = Df/I

Jika ada pertukaran risk di parent company, maka :

ke Ke’

Sehingga WACOC =

ki = k0 +(1-L)(Ke’– ke) – a(Ke’-ks) – b {id(1-t)-if}

Contoh :

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Suatu Investasi membutuhkan dana $ 100M, dipenuhi dari

$20M parent company fund, $ 25M retained earning
subsidiary dan $ 55 M new debt by the subsidiary .
COEC 14%, CODC after adjusted tax 5%. Perbandingan
ideal MA : MS = 30% : 70%.
k0 = ( 14% x 0,7 ) + ( 5% x 0,3) = 11,3% .
Investasi mempunyai systematic risk yang tinggi untuk
mendapatkan rate of return 16% on new parent equity dan 6%
on new parent debt. Based on the incremental tax of 8% on
repatriated earning .
Cost of return earning = 16% ( 1-0,08) = 14,7%

The nominal LC rate of interest 20% dan antisipasi rata-rata

annual devaluation sebesar 7%. A Foreign tax rate 40%.

The expected cost of LC debt =

{ 0,2 x (1-0,4)(1-0,7) – 0,07}= 4,2%
WACOC total =
kt= 0,113+0,7(0,16-0,14)-{25/100(0,16-0,147)-55/100(0,06-
0,042}

= 11,4%.

WACOC khusus parent company ( tanpa dana luar negeri)=

( 0,16x0,7) + (0,06 x 0,3) = 13 %

Jika equity 100% dengan lembar saham biasa =
COC = ke = rf +  ( rm – rf) , maka besarnya = 16%
 = all equity Betta

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Current asset management

1. cash management.

* Cash Inflow : mata uang local

Mata uang internasional ( perlu
proyeksi kurs )
* Cash Outflow : mata uang local
Mata uang internasional ( perlu
penetapan spot rate / forward
rate).
* Saldo Kas : Secukupnya disimpan
Selebihnya perlu financial
Investment
( Valas, saham, portofolio)

2.Receivable
* Kredit : domestic
Internasional
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* Piutang : perlu term of sales , perlu forward

rate.

3.Inventory
Biaya yang dikeluarkan :

Added interest Opportunity Added time Cost per

Expense = cost of fund + in transit + part

International portofolio Investment

Portofolio Investment.

Investasi dalam berbagai surat berharga ( saham, obligasi, valas )

untuk mengurangi risiko.
Pendapatan diperoleh =
Total dollar

return = Dividend + Interest Income + Cap. Gain/loss + Curr.gain/loss

1. obligasi ( bond)

Dollar return = local currency return x currency gain/loss

Rumus penghasilannya =

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B(t) – B(0) + C
1 + rs = 1 + ( 1+g)
B(0)

B(t) – B(0) + C
rs = 1 + ( 1+g) – 1
B(0)
B(t) = harga obligasi mata uang local waktu t
C = penghasilan coupon mata uang local
g = persentase peribahan nilai $ dengan mata uang local.

Contoh : Harga awal obligasi local $95, coupon 8 harga akhir

periode (1 tahun) sebesar $97. Dalam satu tahun
apresiasi Kurs 3%.

97 – 95 + 8
rs = 1 + ( 1+0,03) – 1
95

rs = 13,8%.

2.saham ( common stock)

Total dollar return dalam 1 periode =

Dollar return = local currency return x currency gain/loss

Rumus =

P(t) – P(0) +D/V

1 + rs = 1 + ( 1+g)
P(0)

P(t) – P(0) + D/V

rs = 1 + ( 1+g) – 1
P(0)

P(t) = local currency stock price at t

D/V = local currency dividend income
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Contoh :
Harga saham local 50, dividen income 1. Perkiraan harga 1
tahun lagi harga local saham 48 serta akan terjadi
depresiasi Kurs sebesar 5%.

48 – 50 + 1
rs = 1 + ( 1+0,05) – 1
50
rs = - 1,9%.

3.Diversifikasi Internasional.

a.Pada diversifikasi Internasional, risiko ( Beta) diukur antar

Negara.

Foreign market Standard deviation of Foreign market

Beta = Correlation with x
US market Standard deviation of US market.

CAPITAL BUDGETING.
Perbedaannya pada prediksi EAT/NCF.
Proyeksi penjualan diperhitungkan risiko politik di
subsidiary.
Proyeksi :
Total Sales = Vol x Harga jual ----> diperhitungkan risiko
politik dengan probability.
Total Cost = Total FC + VC + SVC
Selisihnya = EBIT
Interest --> Utang dalam negeri dan luar negeri (bayar dengan
mata uang asing --> kurs)
Tax --> dilokasi subsidiary
EAT = EBT – Tax
Dividen, dibayarkan dengan mata uang Home country.

MINI CASE. 6.
Citrus Products Inc. is a medium-sized producer of citrus juice drinks with groves in Indian River
County, Florida. Until now, the company has confined its operations and sales to the United
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States, but its CEO, George Gaynor, wants to expand into Europe. The first step would be to set
up sales subsidiaries in Spain and Sweden, then to set up a production plant in Spain, and finally to
distribute the product throughout the European common market. The firm’s financial manager,
Ruth Schmidt, is enthusiastic about the plan, but she is worried about the implications of the
foreign expansion on the firm’s financial management process. She has asked you, the firm’s
most recently hired financial analyst, to develop a 1-hour tutorial package that explains the basics
of multinational financial management. The tutorial will be presented at the next board of directors’
meeting. To get you started, Schmidt has supplied you with the following list of questions.
a. What is a multinational corporation? Why do firms expand into other countries?
b. What are the six major factors that distinguish multinational financial management from financial
management as practiced by a purely domestic firm?
c. Consider the following illustrative exchange rates.
U.S. Dollars Required to Buy
1 Unit of Foreign Currency
Euro 1.2500
Swedish krona 0.1481
(1) Are these currency prices direct quotations or indirect quotations?
(2) Calculate the indirect quotations for euros and kronor (the plural of krona is
kronor).
(3) What is a cross rate? Calculate the two cross rates between euros and kronor.
(4) Assume Citrus Products can produce a liter of orange juice and ship it to
Spain for $1.75. If the firm wants a 50% markup on the product, what should
the orange juice sell for in Spain?
(5) Now assume that Citrus Products begins producing the same liter of orange
juice in Spain. The product costs 2 euros to produce and ship to Sweden,
where it can be sold for 20 kronor. What is the dollar profit on the sale?
(6) What is exchange rate risk?
d. Briefly describe the current international monetary system. How does the current
system differ from the system that was in place prior to August 1971?
e. What is a convertible currency? What problems arise when a multinational company
operates in a country whose currency is not convertible?
f. What is the difference between spot rates and forward rates? When is the forward
rate at a premium to the spot rate? At a discount?
g. What is interest rate parity? Currently, you can exchange 1 euro for 1.27 dollars
in the 180-day forward market, and the risk-free rate on 180-day securities is 6%
in the United States and 4% in Spain. Does interest rate parity hold? If not,
which securities offer the highest expected return?
h. What is purchasing power parity? If grapefruit juice costs $2 a liter in the United
States and purchasing power parity holds, what should be the price of grapefruit
juice in Spain?
i. What effect does relative inflation have on interest rates and exchange rates?
j. Briefly discuss the international capital markets.
k. To what extent do average capital structures vary across different countries?
l. Briefly describe special problems that occur in multinational capital budgeting,
and describe the process for evaluating a foreign project. Now consider the following
project: A U.S. company has the opportunity to lease a manufacturing facility
in Japan for 2 years. The company must spend ¥1 billion initially to
refurbish the plant. The expected net cash flows from the plant for the next 2
years, in millions, are CF1 = ¥500 and CF2 = ¥800. A similar project in the
United States would have a risk-adjusted cost of capital of 10%. In the United
States, a 1-year government bond pays 2% interest and a 2-year bond pays
2.8%. In Japan, a 1-year bond pays 0.05% and a 2-year bond pays 0.26%. What
is the project’s NPV?
m. Briefly discuss special factors associated with the following areas of multinational
working capital management:
(1) Cash management
(2) Credit management
(3) Inventory management

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