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We use data from the balance sheets of controlled foreign corporations,(CFCs) to study the real and financial behavior of U.S. multinational corporations. Previous literature on repatriations has mostly been restricted to the choice between dividend distributions to the parent and further real investment in the CFC. The balance sheet data allows us to study a broader range of financial flows between CFCs and parents. Our theoretical work considers models that depart from the previous work in several important ways. We drop the standard arbitrage condition in which the after-tax return to equity and debt is equalized on the margin and instead impose a worldwide financial constraint consistent with a rising cost of debt finance. In our model, parents can borrow against financial assets held abroad and may allocate debt across locations to achieve the lowest cost of capital at home and abroad. We also consider the implications of models in which CFCs can invest in CFCs in other foreign countries. We explain how low-tax CFCs can repatriate tax-free by investing in high-tax CFCs that are repatriating income to parent corporations. Our theoretical results confirm that financial assets, including the equity or debt of other CFCs, are attractive alternatives to repatriation and investment in real assets. We show that if the parent can borrow against its CFC's financial assets it can achieve the equivalent of a dividend repatriation. Our regression results confirm the importance of tax considerations in explaining CFC holdings of financial assets. Low-tax CFCs invest in financial assets in order to avoid U.S. taxes on repatriations. CFCs in high-tax locations are much more highly leveraged than low-tax CFCs.

Capital costs.

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November 1998 To what extent did tightening monetary policy magnify the East Asian crisis through its adverse effects on credit supply? In the Republic of Korea, interest rate spreads, which capture credit channel effects, influence economic activity, and these effects are disproportionately larger for small and medium-size enterprises. So policymakers who neglect credit channel effects might be overkilling the economy and altogether overlooking the disproportionate effects of monetary and financial shocks on some sectors. The debates surrounding the recent East Asian crisis have focused not only on causes but also on policy actions in the wake of the initial shock. This has raised questions about the relationship between monetary policy and market confidence. Specifically, would rising interest rates bolster or depress market confidence? To answer this question requires assessing whether, and to what extent, monetary and financial shocks are magnified through the economy via the credit channel. Domaç and Ferri focus on the Republic of Korea-a particularly good case for testing credit channel effects-with two objectives: ° To ascertain whether and to what extent interest rate spreads could help predict subsequent fluctuations in real economic activity. ° To test whether small and medium-size enterprises suffer more than other businesses do from the adverse effects of the credit channel. The authors'empirical findings support the hypothesis that spreads that capture credit channel effects do indeed influence economic activity. Specifically, spreads contain significant information for predicting the future course of industrial production. The effect is, as one might have assumed, disproportionately larger for small and medium-size enterprises. Thus policymakers, in Korea and elsewhere, who neglect credit channel effects might be overkilling the economy and altogether overlooking the disproportionate effects of monetary and financial shocks on various segments of the economy. This paper-a product of the Poverty Reduction and Economic Management Sector Unit and the Financial Sector Development Sector Unit, East Asia and Pacific Region-is part of a larger effort in the region to analyze the patterns and consequences of the East Asian crisis, with particular reference to the link between the real and financial sectors. The authors may be contacted at idomac@worldbank.org or gferri@worldbank.org.

Financial crises. --- Capital costs.

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Agriculture, Cooperative --- Capital costs. --- Costs.

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Solar thermal energy --- Capital costs --- Steam-turbines.

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Das bewährte Lehrbuch verbindet die klassischen Fragen der Investition und Finanzierung von Unternehmen mit der Betrachtung von Finanzmärkten und bietet somit eine moderne Sicht der Unternehmensfinanzierung. Es werden Themen behandelt und Methoden entwickelt, die in der Finance heute zum Standard gehören. Dabei werden ebenso kleinere Unternehmen, Neugründungen sowie Ventures in den Blick genommen. In der vorliegenden Neuauflage wurden die Inhalte aktualisiert und gestrafft. Das Buch setzt sich jetzt aus Modulen zusammen, die unabhängig voneinander gelesen werden können. Dies ermöglicht es, gezielt einzelne Themenbereiche auszuwählen.

Capital costs. --- Finance. --- Indicators. --- Investment. --- Valuation.