Proposed Company Strategy

Instructions

Imagine that you are the CEO of a multinational corporation (some examples are provided below). The company has excess cash on hand and is seeking to invest it. In a 1500-word essay, analyze your options globally and come up with a strategy to put the company’s $500 million idle cash fund to use. Cite a minimum of three external resources to support the content of your analysis. Use the current APA style guide to format your assignment.

Cover the following concepts in your analysis:

1. Risk and return associated with the investment

• Your discussion should focus on the following risks: project-specific risk, industry-specific risk, competitive risk, international risk, and market risk
• Discuss how diversification in an investment helps in reducing the risk associated with the investment
• Use different models like CAPM, APM, etc., to conduct an analysis of risk vs return

2. Valuation methods used to choose the best investment option

• Your discussion should focus on cost approach, market approach and discounted cash flow approach.
• Use examples and comparative analysis to support your discussion

3. A detailed financial plan for the multinational corporation

• Here you will discuss how you will create a detailed financial plan for the selected organization. Make sure to consider various barriers associated with capital flows.
• The multinational financial management process includes cash management, inventory and accounts receivable management, financing and capital expenditures.
• Consider the factors affecting International Portfolio Investment

4. Cost of capital associated with the corporation based on the current capital structure

• In this section include cost of capital computations associated with the selected organization.
• Discuss each component used in the cost of capital formula
• Discuss challenges associated with cost of capital computations

5. Capital budgeting and capital structure decisions

Company Selection

You can choose any one of the following MNC’s or you can select a company of your own choice:

1. Pepsi Co.
2. Tata Consultancy Services
3. Microsoft
4. IBM
5. The Coca-Cola Company

Resources

Recommended resources for your analysis are:

Yahoo! Finance

Chron: The Capital Structure for a Multinational Corporation

Harvard Business Review: A Refresher on Cost of Capital

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