GRA 6292 International Corporate Finance

GRA 6292 International Corporate Finance

Course code: 
GRA 6292
Department: 
Finance
Credits: 
6
Program of study: 
Master of Science in Law and Business
Course coordinator: 
Øyvind Norli
Espen Henriksen
Product category: 
Master
Portfolio: 
MSc in Law and Business
Semester: 
2020 Autumn
Active status: 
Active
Teaching language: 
English
Course type: 
One semester
Introduction

In today’s globalized world, all financial decisions, such as investments, mergers and acquisitions, have international dimensions. The international dimension adds additional challenges and layers of complexity. In particular, exchange rates and cross-country differences in regulation, taxation, political risk and governance quality all impact the way financial decisions are made.

This course aims to provide the participants with a sound understanding of financial decision-making in the multinational firm. The course is applied in nature and can be broadly split into three parts. The first part of the course covers the basics of exchange-rate determination, including payment systems and the organization of foreign exchange markets. It will also cover developments in digital cash, cryptocurrencies, and blockchain technologies. The second part covers instruments to manage and hedge exchange-rate risk. The third, and most important part of the course, focuses on the financial management of the multinational firm. It covers some traditional issues in corporate finance such as capital budgeting, cost of capital, and investments in physical assets, and how these issues are analysed in an international perspective.

Learning outcomes - Knowledge

The candidate:

  • has advanced knowledge within the general field of international corporate finance and specialized insight in the additional challenges operating with several currencies entail
  • can apply knowledge to new questions firms face when operating across jurisdictions and with different currencies
  • understands the value added for society of firms operating in an international environment
Learning outcomes - Skills

The candidate:

  • can analyse and deal critically with various sources of information and use them to structure and formulate solutions to challenges firms face when operating across jurisdictions and with different currencies
  • understands existing theories, methods and interpretations for currency fluctuations and can work independently to solve practical problems when firms face exchange rate risks
  • can use relevant methods from financial research in an independent manner
General Competence

The candidate:

  • can analyse relevant academic, professional and research ethical problems in the area of international corporate finance
  • can apply her/his knowledge and skills in new area of international corporate finance in order to carry out advanced assignments and projects
  • can communicate extensive independent work and masters the language and terminology of international corporate finance
Course content
  1. The foreign exchange market and exchange rate determination
    1. The market for foreign exchange
    2. Cryptocurrencies, cryptoassets and blockchain technologies
    3. The concept of nominal exchange rates and real exchange rates
    4. Hypothesis 1: nominal exchange-rate volatility is a reflection of differences in price and cost levels across countries
    5. Hypothesis 2: nominal exchange-rate volatility is a reflection of differences in interest-rate levels across countries
       
  2.  Hedging foreign-exchange risk
    1. Forwards and futures
    2. Currency options
    3. Swaps
       
  3. Financial management of the multinational firm
    1. Foreign-exchange transaction, economic and translation exposure
    2. Foreign direct investment and cross-border acquisitions
    3. Sovereign political risk
    4. International capital structure and the cost of capital
    5. International capital budgeting
    6. Multinational cash management
    7. International trade finance
    8. International tax environment and transfer pricing
Teaching and learning activities

-

Software tools
No specified computer-based tools are required.
Additional information

Please note that while attendance is not compulsory in all courses, it is the student’s own responsibility to obtain any information provided in class.

Qualifications

All courses in the Masters programme will assume that students have fulfilled the admission requirements for the programme. In addition, courses in second, third and/or fourth semester can have specific prerequisites and will assume that students have followed normal study progression. For double degree and exchange students, please note that equivalent courses are accepted.

Required prerequisite knowledge

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Exam categoryWeightInvigilationDurationSupport materialsGroupingComment exam
Exam category:
Submission
Form of assessment:
Written submission
Exam code:
GRA 62921
Grading scale:
ECTS
Grading rules:
Internal and external examiner
Resit:
Examination when next scheduled course
100Yes3 Hour(s)
  • BI-approved exam calculator
  • Simple calculator
  • Bilingual dictionary
Individual
Exams:
Exam category:Submission
Form of assessment:Written submission
Weight:100
Invigilation:Yes
Grouping (size):Individual
Support materials:
  • BI-approved exam calculator
  • Simple calculator
  • Bilingual dictionary
Duration:3 Hour(s)
Comment:
Exam code: GRA 62921
Grading scale:ECTS
Resit:Examination when next scheduled course
Type of Assessment: 
Ordinary examination
Total weight: 
100
Student workload
ActivityDurationComment
Prepare for teaching
6 Hour(s)
Case preparation.
Student's own work with learning resources
85 Hour(s)
Includes preparation for class.
Group work / Assignments
30 Hour(s)
Teaching on Campus
36 Hour(s)
Including case presentations.
Examination
3 Hour(s)
Sum workload: 
160

A course of 1 ECTS credit corresponds to a workload of 26-30 hours. Therefore a course of 6 ECTS credits corresponds to a workload of at least 160 hours.