• how to evaluate projects in foreign countries
• how to manage exposure to currency risk
• how to design international corporate structure to maximize firm value
• what challenges firms face when issuing capital abroad
• what the options and their consequences for international investment are
• how firms can finance foreign expansion

This course introduces students to the challenges and opportunities firms face in international financial markets. The course investigates how firms can manage exposure to different forms of risk resulting from international operations. First, we look into currency markets and develop tools firms can use to manage exposure to several currencies. We also look into opportunities this provides for the diversification of risk and how exposure to foreign currencies has consequences for firm strategy. Second, we investigate how firms can navigate different tax and institutional regimes to optimize capital structure and the allocation of profits to business units. Third, we look at the integration of capital markets and challenges firm face when issuing securities abroad. Finally, the course covers means of valuing and managing investments in foreign currencies. Taken together, the course is designed to prepare students to answer questions about strategic implications of internationalization using tools based on financial analysis.

Preliminary assignment: read Agmon (2006)

Class 1: Introduction to international finance and country risk

Class 2: The international monetary system and exchange markets

Class 3: Currency futures and currency options

Class 4: Managing exposure to currency risk

Class 5: International capital budgeting

Class 6: Taxes and capital structure in the multinational firm

Feedback activity: In-class quiz and discussion of answers

Class 7: International capital issues and capital markets

Class 8: Real options, joint ventures, and international M&A

Class 9: Project finance

Class 10: Case study on international capital budgeting

Class 11: Course wrap-up and exam preparation

Preliminary Assignment: To help students get maximum value from ISUP courses, instructors provide a reading or a small number of readings or video clips to be read or viewed before the start of classes with a related task scheduled for class 1 in order to 'jump-start' the learning process.

Course timetable is available on https://www.cbs.dk/uddannelse/international-summer-university-programme-isup/courses-and-exams

We reserve the right to cancel the course if we do not get enough applications. This will be communicated on https://www.cbs.dk/uddannelse/international-summer-university-programme-isup/courses-and-exams end February 2019 at the latest.

Mandatory readings:

Case: Globalizing the Cost of Capital and Capital Budgeting at AES (HBS case: https:/​/​hbsp.harvard.edu/​product/​204109-PDF-ENG?itemFindingMethod=Search).
Papers:
Agmon, T. (2006). Bringing financial economics into international business research: Taking advantage of a paradigm change. Journal of International Business Studies, 37(5), 575-577.
Blass, A., & Yafeh, Y. (2001). Vagabond shoes longing to stray: Why foreign firms list in the United States. Journal of Banking & Finance, 25(3), 555-572.
Kardes, I., Ozturk, A., Cavusgil, S. T., & Cavusgil, E. (2013). Managing global megaprojects: Complexity and risk management. International Business Review, 22(6), 905-917.

Additional relevant readings:

Sercu, P. (2009). International finance: Theory into practice. Princeton University Press.
Buckley, A. (2004). Multinational finance. Pearson Education.
Butler, K. C. (2016). Multinational Finance: Evaluating the Opportunities, Costs, and Risks of Multinational Operations. John Wiley & Sons.
Gatti, S. (2012). Project finance in theory and practice: designing, structuring, and financing private and public projects. Academic Press.