Background Note | HBS Case Collection | January 1995 (Revised August 1997)

Cross-Border Valuation

by Kenneth A. Froot and W. Carl Kester

Abstract

Provides a review of valuation techniques used to assess cross-border investments. Discusses the discounting of free cash flows with a weighted average cost of capital and the use of adjusted present value. Special concerns such as foreign-exchange risk, country risks, and international diversification are also discussed. Unlike Note on Cross-Border Valuation, this note contains no discussion of valuing real options. A rewritten version of an earlier note.

Keywords: Valuation; Cross-Cultural and Cross-Border Issues;

Citation:

Froot, Kenneth A., and W. Carl Kester. "Cross-Border Valuation." Harvard Business School Background Note 295-100, January 1995. (Revised August 1997.)