公司财务讲义(英文版).ppt59

CORPORATE FINANCE
Valuing International Cash Flows
Regression Model and Expectation (1)
Regression: measure relationships between variables when establishing policies.
EXPt = b0 + b1 × USDt-1 + b2 × GNPt-1 + ∙∙∙ + ut.
EXPt = % change in China exports to the U.S.. b0 = a constant. USD = % change in the value of U.S. dollar. b1 = regression coefficient measuring 1% change in USDt-1 will lead to x% change in EXPt. GNP = % change in the U.S. GNP. B2 = regression coefficient measuring 1% change in GNPt-1 will lead to x% change in EXPt. ut = an error term.
Regression Model and Expectation (2)
If b0 = 0.002, b1= 0.08, b2 = 0.36, USD1-1 = 5%, GNP1-1 = -1%, if insert these figures into the regression model, EXP1 = 3.84%. It means that one year later China exports to the U.S. will increase 3.84%.
Equilibrium Spot Exchange Rate
    E ( RMB / $1 )
                                     S
        E0
                                   D

                        Q0                 Q of $
When D for $ = S of $, Q0 = the equilibrium quantity of $, E0 = the equilibrium spot exchange rate. 

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