International Finance and Financial Management

On 14 th of December 2017, a huge landmark deal come in to place; Disney acquiring 21 st century fox assets for $52.4 billion in cash and stock, with the objective of launching streaming services. Not only that, personally it signify that Disney will gain the privilege of investing and controlling 21 st century fox entertainment assets based on X Men and Fantastic 4 Intellectual Properties to enter the Marvel family, allowing Disney to launch new moves based on those brands which will increase Disney’s revenues because who doesn’t like to pay and watch new Marvel movies because it is iconic and fans will always craving more on those movies and will subscribe to Disney streaming media if it is available.   Focusing on Merging and Acquisition theory, well it’s all about synergies and takeover cases. Such as in 2018 Disney values 21 st Century Fox for $71.3 billion and I am confuse on how they manage to value that much for a company that currently have $34 billion in Net As...

It started in 2005, where housing market is booming, sub prime loans in demand, poor families issue a mortgage and gain 5 or more houses based on large borrowings. Securitisation is applied, converting mortgages to Mortgage Backed Securities and bundled them together accordance to credit ratings packaged to a Collateralized Debt Obligation. Sounds complex isn’t it? But, there’s only one thing that come out of my mind, what really happen? That make this sparks an economic crisis, and how investors provide wrong valuations to these securities and companies thinking that it will generate profits, solvency, growth and future business benchmarks, but at the end it’s a toxic investment, incur losses to everyone and companies went bankrupt. There was a scene that shocked me, where Brownfield Fund bet against the market with the help of Ben to short Mortgage Backed Securities with AA ratings, and that scene where the Brownfield Fund successfully short the MBS, Ben claims that if they ar...

When you invest in a company, what do you expect? Gaining higher returns from the investment or sustaining that ownership in the company? Obviously, sustaining the ownership of the company with the objective of a business future benchmark, that way to gain continues return which increases your wealth and enables financial sustainability. However, some companies provide new dividend policies that does not make sense and making the company's lose its shareholders and experience insolvency, which are in strains to cut the dividend payment with the objective of increase the income of the company, well, obviously the shareholders will sell their shares from this bad news of gaining lower return from the guaranteed amount, hence negative abnormal returns.  Current example may include General Electric share price in 2017 was $20.49 and share price in 2018 reduces to $9.42 because of new dividend policies with massive reduction of 50% dividend yield and if this continuously reducing t...

One of my favorite school subjects was Economics, because it teaches you the science within decision makers based on human nature and fallibility impacts the real world along with themselves. This signify as human behavior or corporate behavior based on their decision making on funding and spending either from equity or debt, which is called capital structuring. The basic assumption of human spending is by using their own money or someone else’s money, the reason of borrowing someone else’s money is because to double their spending and investment to gain more resources to satisfy wants and needs. However, the consequence of borrowing is that it accumulated debt payment and possible debt default. Compare to a company the capital structure is basically based on the pecking order theory, either the company use its own money, borrow money, issuing hybrid stocks or issuing common stocks. Knowing that, the most use financial tool that drives the world is money, and most companies in...

On this Blog I will review about the infamous Lehman Brothers that has the entitlement to be: The Bank that crash the world, the Bank that creates the infamous 2008 credit crisis and lastly the bank with a long-term successful CEO, however nowadays his known as a criminal. The 2008 financial crisis is one of my favourite economic cases that devastate not only in the US, however all around the world, and one of the major players was Lehman Brothers which was the 4 th major Investment Bank in the US with a net profit of $1.3 billion and $398 billion in assets in 2007, however because of its insidious banking strategies that creates the financial crisis, Lehman Brothers went bankrupt. Furthermore, I’m going to relate this topic with the finance theory of International Cost of Capital which are formulas and calculation to value a debt and equity securities and determining the amount of return, value, spreads and risks. Lehman Brothers plays a big role in international inve...