module specification

The module explores the theoretical underpinnings and empirical evidence concerning the activities of corporate finance from an international perspective.  The module offers students the opportunity to develop their knowledge in a range of areas related to the international financial system, theories explaining foreign exchange rate behaviour, hedging currency risks, sources of finance for international trade and investment projects for both large and SMEs, the effect on international capital structure of investment decisions, risk exposure and management of risk, cross-border mergers and acquisitions, and multinational working capital management. These will be dealt with within the overall framework of their relation to international corporate activity.  The module stresses the application of relevant theories, models and the current underlying empirical evidence for the analysis and evaluation of major corporate activities and decisions.

The aims of the module are:
• To provide a framework for students to explore corporate strategies and decisions in an international perspective.

• To offer thorough coverage of the international monetary climate, including theories that describe the determinants of foreign exchange rates, Financing international trade, Raising capital from global capital markets, foreign exchange risk management and international capital budgeting and investments.

International financial environment: The exchange rates regimes and international monetary system.

Sources of financing in SMEs: financial reports equity and debt finance through capital markets, banks and other institutions. 1

Sources of financing in global firms: corporate report, financing international trade, equity and debt finance through international capital markets, money markets, banks and other institutions.

International capital structure: The costs of capital for global firms, international capital asset pricing model and its implications.

Multinational capital budgeting and investments: evaluation of investment projects and decision making. 2

The foreign exchange market: international parity relations, theories explaining determinants of exchange rates, functions of the spot and forward markets. Currency forwards, futures and options and their application for currency risk management 1

Risk management: risk exposures (transaction, translation and economic exposures) and foreign exchange risks.

Multinational working capital management: management of trade receivables, trade payables, inventories and cash

Learning and teaching are structured by using a 2-hour lecture and 1-hour seminar in each week as required.

The lectures will outline the key concepts, theories and models to prepare students to develop the capability to solve problems and evaluate alternative decision options.
The seminars will be used by lecturer and students to discuss assigned topics on various aspects of the material covered by the module.
It is expected that students will spend 8 hours per week outside the lecture and seminar reading assigned material, collecting data for analysis, solving problems and writing essays or preparing essay plans to consolidate their understanding of the module.

On successful completion of this module students will be able to:
• Demonstrate a conceptual understanding both of the historical and contemporary policy, and institutional issues in the international financial system, and their implications for the development of the international financial architecture dealing with international trade and finance; discuss the theoretical determinants of foreign exchange rates and the functions of currency markets; analyse the functioning of the major capital and money markets as well as international banking, finance and  how they may be used by global firms to meet their funding, liquidity and risk management objectives;

• Critically evaluate aspects of capital investment projects that multinational firms undertake; develop the skills of research, data collection and its transformation, analysis and the art of written communication.

There are two assignment components.
Assignment component one: An academic essay which will require students to demonstrate their competence in undertaking in-depth research and analysis, using quantitative models as well as critical reflection on the module topics studied during the assessment period.
An individual draft of outline of an essay of 1500 words is expected in week 7. The essay will require students to use information from databases and/or corporate annual reports, as well as referring to academic literature to demonstrate understanding of major conceptual and practical problems. This will enable additional formative feedback to be given to students before the presentation of the final coursework.
A final essay, based upon the above outline will constitute the first assessment component for the module. Constructive feedbacks from this coursework will be available online with results published in the Turnitin system.
Assignment component two: An unseen and closed final examination online 24 hrs

Formative feedback will be given to students during seminar on a weekly basis as the tutor and other members of the seminar group respond to oral discussion by students. Students will be required to provide an outline of how they will answer a range of questions during the seminars and feedback will be provided to students during sessions.

Core Texts

Berk, J. and DeMarzo, P. (2013), Corporate Finance, 3rd Edition, Pearson, Harlow

Jacque, L. L. (2014), International Corporate Finance: Value Creation with Currency Derivatives in Global Capital Markets, Wiley and Sons, Ltd, West Sussex

Other Texts

Copeland, L. (2014), Exchange Rates and International Finance, 6th Edition, Pearson, Harlow

Eiteman, D., Stonehill, A. and Moffett, M. (2015) Multinational Business Finance, 14th Edition, Pearson, Harlow

Levi M. D., (2017), International Finance, 5th Edition, Routledge, Oxon

Pileam, K. (2013), International Finance, 4th Edition, Palcrave Macmillan, Hampshire

Ross S A, Westerfield, R., Jaffe, J.  and Jordan, B. D. (2009), Modern Financial Management, 8th Edition, McGraw Hill

Shapiro, A. (2013) Multinational Financial Management, 10th Edition, Wiley & Sons, Inc.

Journals
Journal of Financial Economics
Journal of Finance, European Financial Management
Financial Management
Journal of Banking and Finance
Journal of Applied Corporate Finance
Financial Analysts Journal

Online resources
International Monetary Fund www.imf.org
The World Bank www.worldbank.org
The UK Data Service www.ukdataservice.ac.uk