Essay on Cross Border Valuation Issue

9648 Words39 Pages
CROSS-BORDER VALUATION ISSUES.

Ninfa Borth Altadonna Jeff Fosler Susan Hua
Shawn Kennedy Brian Limurti Alex Santibanez

Valuation and Corporate Combinations
Finance 668.25
Sat., Dec. 4, 2010
Contents

I. Executive Summary 3 II. Summary of Key Terms & Concepts 3 III. Discuss various Valuation Implications and Applicability to MNC’s & global capital markets 13 IV. Discuss DCF Methods (Multiple analyses in US or Foreign comparables) 18 V. Discuss a Short Example 23 VI. Real World Company Case Study 1: 25 VII. Real World Company Case Study 2: 27 VIII. Conclusion 28

I. Executive Summary

There are many
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Exchange Rate is the rate at which one currency may be converted into another. The exchange rate is used when simply converting one currency to another (such as for the purposes of travel to another country), or for engaging in speculation or trading in the foreign exchange market. There are a wide variety of factors which influence the exchange rate, such as interest rates, inflation, and the state of politics and the economy in each country.
Tax Rates – The percent of income paid as tax, or the percent of the value of a good, service or asset paid as tax.

*Created from following source: http://www.business.nsw.gov.au/aboutnsw/climate/A14_corp_tax_rates.htm
1 The effective tax rate for foreign companies with income less than INR 10 million is 41.2% (40% basic corporate tax plus education cess of 3% on tax); otherwise it is 42.23% (40%, plus surcharge of 2.5% of the tax, plus education cess of 3% on tax and surcharge). The effective tax rate for domestic companies having income less than INR 10 million is 30.9% (30% basic corporate tax plus education cess of 3% on tax), otherwise it is 33.99% (30% plus surcharge of 10% of the tax, plus education cess of 3% on tax and surcharge). A Minimum Alternate Tax (MAT) is levied at 10% of the adjusted profits of companies where tax liability is less than 10%
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