Finance in the global market
- Module Code:
- Taught in:
- Term 2
The module aims to analyse the main financial decisions faced by corporations operating in a global environment. It builds on the modules on Corporate Finance, Risk Management: Principles and Applications, Financial Law and Legal Aspects of Corporate Finance. It extends the analysis developed in those modules by exploring the international dimension of the strategy of the corporation. The module focuses in particular on the sources of capital to the multinational firm and on the foreign investment and acquisition decisions.
Objectives and learning outcomes of the module
The main objectives of the course are to:
- Analyse foreign exchange markets and the determinants of exchange rates
- Explain the principles of techniques for managing firms foreign exchange risk
- Discuss the effect of international financing on firms cost of capital and on investment decisions
- Outline the problems of international corporate insolvency
- Analyse the nature of currency crises and international debt
By the end of the course, students should be able to:
- Understand the theories of the exchange rate
- Discuss the possibility of forecasting exchange rates
- Understand the sources of capital for a multinational corporation
- Analyse the determinants of multinationals desired capital structure and its weighted average cost of capital
- Understand and analyse foreign exchange risk and international interest rate risk
- Understand and use the principle techniques for managing exchange rate risk
- Understand the main methods of multinational capital budgeting
- Use the principles of international corporate finance to evaluate key case studies
This module consists of a 1-hour weekly lecture over 10 weeks of term plus a revision lecture in term 3 as preparation for the final examination. Students will be supplied with a syllabus with a breakdown week by week of required and additional reading. Reading materials are usually accessed electronically from the BLE and students should come to class prepared.
This module also has a weekly 1-hour tutorial where the questions posed by the tutor relevant to the lecture are explored and discussed by the students. Students also prepare and deliver a short presentation.
Total Work load:
Students on this module will have 2 taught hours each week. Additionally, adequate personal study time should be allocated for reading and class preparation.
Method of assessment
Assessment for this module is in three elements:
- One tutorial presentation at 10%
- One essay of 2,500 words at 30%
- One unseen 2-hour written examination at 60%
All elements except the presentation may be resubmitted
- Eiteman, David K., Arthur I. Stonehill, and Michael H. Moffett, 2012. Multinational business finance, 13th edition, Pearson.
- Smith Roy C., Ingo Walter, and Gayle DeLong, Global Banking, 3rd edition, Oxford, 2012.
- Bekaert, Geert, and Robert J. Hodrick, 2011. International financial management, 2nd edition Prentice Hall.
- de Haan, Jakob, Sander Oosterloo, and Dirk Schoenmaker, 2012, Financial Markets and Institutions: A European Perspective, 2nd edition, Cambridge.
- Desai, Mihir A., 2006. International finance: A casebook, Jon Wiley & Sons.
- Sercu, Piet, 2009. International finance: Theory into practice, Princeton University Press.