Introduction

Walmart Inc. has opened two outlets in Shenzen, China where the population is around 3.7 million. These
outlets are huge and have products bought from both local as well as international markets. Thus,
Walmart earns revenues in huge numbers in the city and the excess revenue needs to be sent back to
the home country of Walmart Inc. i.e. United States. Further, it is expected that Walmart is most likely to
open new outlets in Shenzen or other Chinese cities soon.
Use of Spot market
A spot market is the place where the exchange of international commodities occurs on which transactions
are conducted for instant payment and quick delivery (Smith, 2021). It is also known as the cash market
or effective market. Thus, it is the market where one can quickly exchange foreign currencies at a spot
rate. In this scenario, Walmart stores contain products bought from both local as well as international
markets. Thus, it needs other relevant currencies to buy products from those countries and can use the
spot market to convert the Chinese Yuan into the relevant currency to make the payment of the purchase
of the products. For example, to buy the local Chinese product, it will convert the US dollars into Chinese
currency and when importing products from the international market, it will convert the currency into the
seller’s national currency. 
Apart from this, there will also be excess earnings made by these outlets in China.  Thus Walmart can
use the spot market to convert those excess Chinese Yuan to US dollars and send it back to its parent
country i.e. the USA.
Utilizing international money markets
Financing could be for either the long term or short term.  Borrowing for the short term is required to
maintain liquidity and manage working capital. In this scenario, Walmart is already established in China
and it may lack liquidity or cash for the payment to vendors. In such a case, Walmart may borrow for the
short term from the money market to pay its local or foreign vendors.  
Further, it is sensible for Walmart to lend money in China if the interest rate in China is below that of the
US.  Also, if there is the expectation of depreciation in the Chinese Yuan then it is wise to borrow in the
Chinese currency because of the lower effective interest payment. For example, Walmart acquired 100
million Chinese Yuan at the exchange rate of 0.17 dollars per Yuan. Thus the borrowing amount in USD
becomes $17 million. When the Chinese Yuan depreciates to 0.14 dollars per Yuan, the dollar amount of
the principal amount of 100 million Chinese Yuan falls to $14 million only. Therefore, in this way Walmart
can use the cheap sources of funds through the international money market to establish its other stores in
Asia.
Using International Bond Market
There are two options to acquire long-term financing which are equity and debt. Equity is expensive
compared to debt and also requires to share profit, thus the profitable companies usually opt to issue
debt. It is also necessary to have an optimal debt to reduce the weighted average cost of capital.
Multinational companies use the international bond market when they anticipate there is a strong demand
for bonds in a foreign market or to raise the widely used particular currency through bond issuance in
those markets (Madura, 2018). Walmart can issue bonds in the Eurobond market to secure funds to
expand its outlets in China. The bond could be issued in the currency it requires. Companies always look
to keep their cost of capital low and here Walmart can use the international bond market to raise funds at
low cost.  When Walmart's outlet expansion is completed and it starts to generate cash flows, the amount
can be utilized to pay interest on the bond issued.
Hence, using the international bond market could be a great opportunity for Walmart to secure funds at a
low rate.