Multinational companies usually have more flexibility on financing than purely domestic firms.
Required:
Undertake a review of the current literature to identify the key determinants of capital

structure since the global financial crisis. (40 marks)
Question 2
The attached article from Reuters shows that as the global financial markets begin to recover

there is increased interest in mergers, acquisitions divestments and privatisations.
Required:
Critically evaluate the benefits and disadvantages of expansion via organic growth versus

expansion via acquisition. Marks will be awarded for referencing and using real life cases to

illustrate your answer. (40 marks)
Question 3
Companies often wish to hedge payments or receipts.
Required:
a) Clearly explain in your own words how a money market hedge and forward contract work and how

they can be used to hedge a transaction. You should include a consideration of their benefits,

costs and limitations in your answer. In particular discuss the kinds of currency movements

which can’t be hedged. (12 marks)
b) Give an example of a transaction that a company (Easy Jet) might hedge. You MUST make up

your own example. Taking an example from a book is not acceptable.
For your chosen example demonstrate the use of a forward contract and a money market hedge to

hedge the transaction using real life data. (8 marks)
(20 marks)
You will find the information you need about exchange rates at the sites given below. You may

find that you need to use cross rates to determine the exchange rates you need.
http://www.fxstreet.com/rates-charts/forward-rates/
http://www.oanda.com/currency/historical-rates/
http://www.x-rates.com/historical/?from=SGD&amount=1.00&date=2005-03-01
Marks will be given for the correct use of bid/offer or ask rates and suitable interest rates.

You should include screen shots showing clearly all the data you have use