startup-valuation

International Valuation

valuation_international

Read-onlyIdempotent

Adjust cross-border cash flows for purchasing power parity, country risk premium, and international CAPM using method-specific inputs.

Instructions

Cross-border adjustments: purchasing-power parity, country risk premium, and international CAPM. Method selects the adjustment. Use for cross-border cash flows and country risk; pair with valuation_capm and valuation_time_value. Parameters apply per method: ppp needs spot_rate + inflation_foreign + inflation_domestic; country_risk_premium needs sovereign_yield + us_treasury_yield; intl_capm needs risk_free_rate + beta + mrp + crp. Not for the domestic cost of equity — for that use valuation_capm. Only method is required; all other parameters are method-dependent, so supply those the selected method names and omit the rest (defaults apply where defined). Rate and decimal inputs are fractions (0.10 = 10%); probability and weight lists are in [0,1] and sum to 1. Returns value, method, inputs, assumptions, chapter, formula_number and calculation steps; pure arithmetic — no I/O and no external calls — rounded to 2 decimals, with no auth or rate limits. An unknown method, or a missing method-required parameter, returns an error instead of a value.

Input Schema

TableJSON Schema

Name	Required	Description
`crp`	No	Country risk premium as a decimal.
`mrp`	No	Market risk premium as a decimal.
`beta`	No	Systematic risk beta (market = 1.0).
`method`	Yes	Formula to apply. Options: ppp = Eₜ = E₀·(1+π_foreign)/(1+π_domestic).; country_risk_premium = CRP = sovereign yield - US Treasury yield.; intl_capm = r = Rf + β·MRP + CRP.
`spot_rate`	No	Spot FX rate (domestic per foreign), e.g. 7.2 CNY/USD.
`risk_free_rate`	No	Risk-free rate as a decimal (e.g. 0.04 for 4%).
`sovereign_yield`	No	Foreign sovereign bond yield as a decimal.
`inflation_foreign`	No	Foreign inflation rate as a decimal.
`us_treasury_yield`	No	US Treasury yield as a decimal.
`inflation_domestic`	No	Domestic inflation rate as a decimal.

Output Schema

TableJSON Schema

Name	Required	Description
`error`	No	Error message when the call fails.
`steps`	No	Intermediate steps for traceability.
`value`	Yes	Computed valuation or metric.
`inputs`	No	Echo of the normalised inputs used.
`method`	No	Formula / method name that produced the result.
`chapter`	No	Source textbook chapter.
`assumptions`	No	Modelling assumptions applied.
`formula_number`	No	Source textbook formula number (e.g. '3.1').
`defaults_applied`	No	Optional parameters that were not supplied, so their documented defaults were used.

Schema Changelog

Changes observed during successful MCP inspections.

Changed1 schema field changedv2.1.1Oct 2, 2026

addedOutput schema / properties / defaults_applied

Added value: +{
+  "description": "Optional parameters that were not supplied, so their documented defaults were used.",
+  "items": {
+    "type": "string"
+  },
+  "type": "array"
+}

First observedv0.1.0Sep 30, 2026

TDQS

A4.8/5.0

Behavior5/5

Does the description disclose side effects, auth requirements, rate limits, or destructive behavior?

Annotations already cover read-only/idempotent/no-open-world, and the description adds substantial context beyond them: pure arithmetic with no I/O or external calls, no auth or rate limits, rounding to 2 decimals, and the failure mode (unknown method or missing method-required parameter returns an error rather than a value). It even lists the return fields.

Agents need to know what a tool does to the world before calling it. Descriptions should go beyond structured annotations to explain consequences.

Conciseness4/5

Is the description appropriately sized, front-loaded, and free of redundancy?

Front-loaded with the purpose and method-selection logic, then parameter rules and return behavior; every sentence is substantive. Slightly overlong and includes the irrelevant 'probability and weight lists' clause that appears carried over from a sibling tool.

Shorter descriptions cost fewer tokens and are easier for agents to parse. Every sentence should earn its place.

Completeness5/5

Given the tool's complexity, does the description cover enough for an agent to succeed on first attempt?

Covers purpose, method selection, per-method parameter requirements, units, error behavior, and return contents. With a 10-parameter schema, one required parameter, and an output schema present, nothing essential is missing for correct invocation.

Complex tools with many parameters or behaviors need more documentation. Simple tools need less. This dimension scales expectations accordingly.

Parameters4/5

Does the description clarify parameter syntax, constraints, interactions, or defaults beyond what the schema provides?

Schema coverage is 100%, so baseline would be 3, but the description adds the crucial method-to-parameter mapping (ppp needs spot_rate + inflation_foreign + inflation_domestic, etc.) and unit conventions (0.10 = 10%) that the schema does not express. Minor noise from mentioning 'probability and weight lists in [0,1] sum to 1', which do not exist in this schema.

Input schemas describe structure but not intent. Descriptions should explain non-obvious parameter relationships and valid value ranges.

Purpose5/5

Does the description clearly state what the tool does and how it differs from similar tools?

States a specific resource (cross-border valuation adjustments) and enumerates the three supported methods (PPP, country risk premium, international CAPM), so the agent knows exactly what computation this tool performs. It explicitly distinguishes itself from valuation_capm for domestic cost of equity, making it separable from siblings without opening schemas.

Agents choose between tools based on descriptions. A clear purpose with a specific verb and resource helps agents select the right tool.

Usage Guidelines5/5

Does the description explain when to use this tool, when not to, or what alternatives exist?

Explicitly names the use case ('cross-border cash flows and country risk'), names the alternatives ('pair with valuation_capm and valuation_time_value'), and states the exclusion ('Not for the domestic cost of equity — for that use valuation_capm'). It also tells the agent exactly which parameters to supply per method and to omit the rest.

Agents often have multiple tools that could apply. Explicit usage guidance like "use X instead of Y when Z" prevents misuse.

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