The corporate finance function has two roles:  obtaining capital for corporate operations, and allocating financial resources among competing uses and projects.  International operations provide more and different potential sources and uses for financial resources.
 

DETERMINING  CAPITAL  STRUCTURE
D&R, p. 827:  "The company's capital structure, or capitalization, is the permanent financing of its assets through long-term debt, capital stock, and retained earnings.  Its leverage is the ratio of the book value of total debt to total assets."

In general, a company's capital structure is a function of the relative cost at which it can obtain financing from these three sources.  What's the interest rate that the company would have to pay for long-term debt?  What return must be promised for a new stock issue?  Will corporate assets increase sufficiently that new stock shares will not "dilute" outstanding shares?  What are the opportunity costs of retained earnings?

When we consider international business, "country-specific factors are a more important determinant of a company's capital structure than is any other factor" [D&R, p. 827].  These country-specific factors include the country's norms, the relative transactions cost of borrowing versus selling new shares, and the prevailing interest rates.  Companies tend to be more highly leveraged in countries where lenders (are allowed to) take a role in the oversight of their major borrowers (as in Japan and Germany).

FINANCING  MULTINATIONAL  OPERATIONS
A corporation with branches and subsidiaries in several countries faces several choices for its financing.  Let's take a case where a U.S.-based MNC has a wholly-owned subsidiary in Mexico, which plans a major expansion.  What are the options for financing?
 

Options for Financing a Foreign Subsidiary's Expansion

Source of funds	Home country	Host country	International markets
External to the MNC
Debt	U.S.-dollar bonds on behalf of the Mexican subsidiary (or, less likely, secured by assets of the parent company)	Mexican-peso bonds (secured by the subsidiary's assets)	dollar-denominated Eurobonds, foreign bonds, or global bonds (secured by the subsidiary's assets)
New Equity	new U.S. issues in the parent, which retains whole ownership	new Mexican issues in the subsidiary, reducing the parent's ownership stake in the firm	Euroequity issue of the Mexican company's shares in other countries, reducing the parent's ownership stake in the firm
Internal to the MNC
Debt	long-term loan (bonds) from the parent to the subsidiary		long-term loans (bonds) from other subsidiaries to the Mexican subsidiary
New Equity	parent purchases new shares of the subsidiary

Note that MNCs do not unilaterally transfer capital from home to host country.  Once an international subsidiary is established, it may obtain capital from local and international markets.  Indeed, given the corporate advantages that we expect it to have (technology, international markets, quality management, trademarks), the subsidiary can often compete very effectively for capital in its host country, at favorable rates.

MANAGING  INTERNATIONAL  FINANCIAL  EXPOSURE
The text identifies four types of financial exposure of international business operations:
 

TERMS  OF  NOTE

ADR (American Depositary Receipt):  the usual form in which shares in foreign companies are held by Americans;  tradeable receipts for actual shares held by a financial institution in the foreign company.
Eurobond:  "a bond sold in a country other than the one in whose currency it is denominated" [D&R 8th ed., p. G-4]
Eurocredit:  "a loan, line of credit, or other form of ... credit on the Eurocurrency market that has a maturity of more than one year" [D&R 8th ed., p. G-4]
Eurocurrency:  "any currency that is banked outside of its country of origin" [D&R 8th ed., p. G-4]
Euroequity market:  "the market for share sold outside the boundaries of the issuing company's home country" [D&R 8th ed., p. G-4]
foreign bond:  " a bond sold outside of the borrower's country but denominated in the currency of the country of issue" [D&R 8th ed., p. G-5]
offshore financial centers:  "cities or countries that provide large amounts of funds in currencies other than their own and are used as locations in which to raise and accumulate cash" [D&R 8th ed., p. G-10]