International Valuation
valuation_internationalAdjust cross-border cash flows and country risk using purchasing-power parity, country risk premium, or international CAPM; choose the method to get the needed valuation input.
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; other parameters are method-dependent, so supply those named for the selected method and omit the rest (documented defaults apply where defined). Returns an object with value, method, inputs, assumptions, chapter, formula_number and calculation steps. Pure arithmetic: no I/O and no external calls, and numeric results are returned rounded to 2 decimals. No authentication, credentials, or rate limits apply. Supplying an unknown method, or leaving unset a parameter that the chosen method requires, returns an error instead of a value.
Input Schema
| Name | Required | Description | Default |
|---|---|---|---|
| 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
| Name | Required | Description | Default |
|---|---|---|---|
| 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'). |