Explain how the global investment banking process has assisted Microsoft Corporation
Global investment banking has been largely involved in assisting corporations such as Microsoft in raising capital; the banks do this through underwriting or being the corporations guarantee when issuing securities. The investment banks have been helpful when companies have had mergers and acquisitions. The presence of investments globally has been a great significance since they are able to study the global business environment and assist the companies in exploiting the opportunities that come by. For Microsoft, it has existed in the global business environment and the services of investment banks are much needed. The Microsoft Corporation is a public owned multinational corporate that continues to trade its securities since its first initial public offer in 1986.
Global investment banks have been involved in trading of the securities for cash of the securities for other securities. The global banks have been involved in smooth the progress of the transactions and promoting and marketing them. The banks are able to underwrite and research on the securities and advise the banks on the best ways to keep the stocks of the company always trading. They are able to manage the pension funds, hedge funds and mutual funds and more particular manage the public investments. Microsoft has also had acquisitions for instance the acquisition of Skype communications at a fee of $ 8.5 billion dollars and Hotmail among other major acquisitions in the global market.
Explain how regulatory bodies affect financial decision making
Regulators are always the controllers of the market and act as the referee in the market. They always ensure that there is fair play and that no rules are faulted. This is the best way of ensuring the corporations are always confident with the market. The regulator ensures that the market is reasonably stable and always guard against risky behaviors of any investor. The companies are therefore able to make a more major decision without fearing major unforeseen effects in the markets. Regulatory bodies such as Financial Accounting Standards Board (FASB) guard against the illegal markets which make the companies make financial decisions based on the rules given. Indeed, if the regulatory makes any changes in regulations the then companies adjust based on the decision so as to make sure they maximize their profits.
Identify and evaluate contemporary issues in international financial management
In international financial management there are a lot of dynamics and factors in play, the business environment and economic strength is not the same in all the countries. The major issue is the currency used in the trade, the US dollar has been recognized as a major currency but there are other that has been competitive against it such as the euro, yen and the pound. There is also the issue of common markets where regional blocks have grouped to share same markets and strengthen them economically. The interest rates of the markets are also of great impact in the international financial management. Globalization has also influenced international finance management where there has been free flow of goods, services, ideas, and capital. Globalization is also a huge factor since economists can attribute it to economic and financial instability. It has also resulted greater imbalance of trade in third world countries.
Risks involved in international finance include the foreign exchange risk, the cultural risk, political risk, increased opportunities for investing and finance, and regulations and corporate governance differences. For the political risks then there are issues such as taxation policies, monetary policies, contract procedures, and profit repatriation procedures.