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2023/2024  BA-BHAAV6089U  Undergraduate International Finance

English Title
Undergraduate International Finance

Course information
Language English
Course ECTS 7.5 ECTS
Type Elective
Level Bachelor
Duration One Quarter
Start time of the course Autumn, Second Quarter
Timetable Course schedule will be posted at calendar.cbs.dk
Max. participants 100
Study board
Study Board for BSc in Economics and Business Administration
Course coordinator
  • Carsten Sørensen - Department of Finance (FI)
For academic questions related to the course, please contact instructor Thomas Lindner at tl.fi@cbs.dk or thomas.lindner@wu.ac.at
Main academic disciplines
  • Corporate governance
  • Finance
  • Globalisation and international business
Teaching methods
  • Online teaching
Last updated on 08-02-2023

Relevant links
Learning objectives
This course prepares students for careers in international companies. Students learn:
  • how to evaluate projects in foreign countries
  • how to manage exposure to currency risk
  • how to manage exposure to country risk
  • how to design international corporate structure to maximize firm value
  • what challenges firms face when issuing capital abroad
  • what real options and their consequences for international investment are
  • how firms can finance foreign expansion
Course prerequisites
Fundamentals of Finance, Fundamentals of Mathematics
Examination
Undergraduate International Finance:
Exam ECTS 7,5
Examination form Written sit-in exam on CBS' computers
Individual or group exam Individual exam
Assignment type Written assignment
Duration 4 hours
Grading scale 7-point grading scale
Examiner(s) One internal examiner
Exam period Autumn
Aids Limited aids, see the list below:
The student is allowed to bring
  • An approved calculator. Only the models HP10bll+ or Texas BA ll Plus are allowed (both models are non-programmable, financial calculators).
  • Language dictionaries in paper format
The student will have access to
  • Advanced IT application package
Make-up exam/re-exam
Same examination form as the ordinary exam
The number of registered candidates for the make-up examination/re-take examination may warrant that it most appropriately be held as an oral examination. The programme office will inform the students if the make-up examination/re-take examination instead is held as an oral examination including a second examiner or external examiner.
The retake exam follows the same procedures as the ordinary exam.
Course content, structure and pedagogical approach

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 country and 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: International capital budgeting
Class 3: Case study on international capital budgeting (I)
Class 4: Case study on international capital budgeting (II)
Class 5: Case study on international capital budgeting: evaluation and discussion
Class 6: International currency markets and hedging
feedback activity: Mock exam (answers to mock exam questions are provided afterwards)

Class 7: Taxation and reporting in the multinational firm
Class 8: Taxes and capital structure in the multinational firm
Class 9: Real options, joint ventures, and international M&A
Class 10: Project finance
Class 11: Exam preparation and Q&A
 

 

 
Description of the teaching methods
Instructor presentation, case study, student discussion, in-class quizzes (non-graded)
Feedback during the teaching period
Students will have the chance to see their progress in a mock-exam. A Q&A session will help clarify remaining questions before the exam. Every session comes with a set of repetition questions, and answers are provided.
Student workload
Preliminary assignment 20 hours
Classroom attendance 38 hours
Preparation 126 hours
Feedback activity 7 hours
Examination 20 hours
Expected literature

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.

 

 

Additional relevant readings:

 

Chapters 17, 18, and 22 in Sercu, P. (2009). International finance: Theory into practice. Princeton University Press.


Chapters 19-25 in Buckley, A. (2012). Multinational finance. Pearson Education.


Chapters 2-6,12, 14-16 in Butler, K. C. (2016). Multinational Finance: Evaluating the Opportunities, Costs, and Risks of Multinational Operations. John Wiley & Sons.


Chapters 1, and 2 in Gatti, S. (2012). Project finance in theory and practice: designing, structuring, and financing private and public projects. Academic Press.

 
Last updated on 08-02-2023