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¶ … l Finance
In a sense, a foreign acquisition target is assessed in much the same way that any other target would be, but the specifics of the evaluation may differ. All acquisitions must be priced, and this price needs to take into account all of the different risks. The difference with foreign acquisitions is that the risks are going to have different weights. For example, there is little incremental political risk involved in a domestic acquisition, but there is with an international one. Sometimes, there is a lot of incremental political risk. Foreign acquisitions will typically involve foreign exchange rate risk, to a higher degree than the firm currently faces. Post (2006) notes that there are often risk premiums associated with foreign acquisitions, and...
So while the basic mechanics of assessing a foreign target are the same, there are differences between international and domestic acquisitions that will be accounted for in the numbers, so that there are clearly going to be different in terms of the things that are taken into account, and how much attention is paid to each issue.
2.
A real option is a choice that a business might have with respect to a real asset. A company might contractually have a right that it can…
References
Investopedia. (2014). Real option. Investopedia. Retrieved October 15, 2014 from http://www.investopedia.com/terms/r/realoption.asp
Post, D. (2006). Examining merger and acquisition foreign direct investment in the United States: Do high purchase prices drive low returns? Stanford University. Retrieved October 15, 2014 from https://economics.stanford.edu/files/Theses/Theses_2006/Post.pdf
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The State is just taking back its rightful property under the contractual obligations of the agreement signed between the host State and the foreign investor who' assets are being seized in the expropriation. Another cause for direct expropriation is the concept that the State will in some way gain financially, socially, or economically from the expropriate assets beyond their value of compensation. If a particular investment can generate more