International Corporate Finance
The aim of this course is to give the broader insight into the corporate finance, and especially to give certain knowledge of international aspects of corporate finance, which is of great importance today for financial managers, non-financial managers and academic. Particular aims of the module are:
Systematic understanding of corporate finance tools in international corporate decision making process;
Developing students’ abilities to explore the complexity and the dynamic nature of international corporate finance;
Systematic understanding of exchange rates and its influence on international corporate decisions;
Developing students’ abilities to explore the significance of international taxation;
Practical applying the present value, financial statement analysis, risk and return models and, option valuation model to international corporate decision making;
Developing students’ abilities to evaluate the practice in context of relevant international financial business and its theoretical approaches;
Identifying major trends in international corporate finance.
Learning Outcomes
Knowledge
The course will give the students enough knowledge about all important areas of international corporate finance, such as: investment analysis, financing, dividend policy, risk management etc.
On successful completion of this module, the student will be able to demonstrate a systematic and practical understanding informed by current research and relevant professional practice of:
1. Key concepts in international corporate finance;
2. Exchange rate identification, measurement and forecasting;
3. Issues in international taxation;
4. Corporate finance decision making under geographic and political risk.
Skills
The graduate students will be able to solve all kind of problems in international corporate finance, e.g., financing and evaluation of international projects, decision making of short-term international financing, risk management etc.
On successful completion of this module, the student will be able to:
1. manage the exchange rates exposure;
2. evaluate the cross-border projects;
3. identify the possibilities for financing in global market;
4. apply methods for evaluating the performance of foreign operations.
Syllabus
Introduction to International Corporate Finance
International Flow of Funds
International Financial Markets
Determination of Exchange Rates
Currency Derivatives
Exchange Rate Behaviour - International Arbitrage and Interest Rate Parity
Relationship among Inflation, Exchange Rates, and Interest Rates
Exchange Rate Risk Management - Forecasting Exchange Rates
Measuring Exposures to Exchange Rate Fluctuations
Managing Transaction Exposure
Managing Economic Exposure and Translation Exposure
International Capital Budgeting
International Restructuring
Country Risk Analysis
International Cost of Capital and Structure
International Long-Term Financing
Financing International Trade
International Cash Management
Learning, Teaching and Assessment Strategies
While the course focus on understanding the basic theory behind these issues, it also examines empirical evidence and examples of firms' real world activities with the goal of preparing a student for a career dealing with financial decision making in an international environment. The course is mostly lecture style with some discussion of topics through case studies and workshops.
Assessment Scheme
This module is assessed using coursework and examination.
30% Individual coursework (learning outcomes 1, 2, 3, 4) where students are expected to write an essay. Essays will be related to the consideration of issues influence changes in exchange rates and interest rates on corporate decision-makers, and the use of currency derivatives to hedge risks. Due week 8.
20% Group coursework (learning outcomes 3, 4, 6, 7) where students are expected to implement creative problem solving method in small group presentation related to selected case study from practice. Students are expected to be able to formulate the problem and offer solutions. Case studies will refer to examples form practice (practical examples) and will require consideration of evaluation of international investment projects and international capital structure decision. Due week 12.
50% Examination (learning outcomes 1, 2, 3, 4, 5, 6, 7, 8) occurs during the university examination period and is a 2-hour examination. Students are expected to answer 10 closed and 5 open ended questions.
Students need to pass coursework and examination and have minimum 50% in order to pass the module according to the following structure: individual coursework (minimum 15%), group coursework (minimum 10%) and examination (minimum 25%).
Assessment Weighting
Individual coursework 30%
Coursework 20%
Unseen examination 50%
Learning Materials
Essential
Madura, J., Fox R., International Financial Management, Thomson, 2007.
Shapiro, A.C., Multinational Financial Management, International Student Version, 9th Edition, Wiley-Blackwell, 2009.
Bogojevic Arsic, V., Korporativne finansije, Fakultet organizacionih nauka, Beograd, 2005.
Recommended
Indian Institute of Banking and Finance, International Corporate Finance, McMillan, 2007.
Kim, S., Kim, S., Global Corporate Finance: Text and Cases, Wiley-Blackwell, 2005.
Claessens, S., Laeven, L., A Reader in International Corporate Finance, Volume 2, World Bank Publications, 2006.
Cornelius, P., Juttmann, K., Langelaar, B., Home bias in leveraged buyouts, International Finance, Volume 12, Issue 3, pages 321–349, Winter 2009.