MBA 2423 Multinational Financial Management
MBA 2423 Multinational Financial Management
The objective of this course is to provide students with an overall understanding of the financial management practices in multinational companies in a dynamic global business world. The course extends investment and financing decisions in corporate finance by emphasizing the adjustments in multinational firms due to additional risks they are exposed to, namely, foreign exchange risk and political risk, as well as the uneven tax rates in countries that provide room for global tax planning.
This is a standard elective course taught in a Chinese business school, so it has a strong China background. Not only does it specifically explain the rationale and the process of RMB exchange rate reform and the forex market in China, but also it presents many examples of Chinese firms in global investing and financing and hedging foreign exchange risks. This course focuses on analytical skills rather than quantitative calculations. However, students should demonstrate that they have fundamental knowledge in Macroeconomics (GDP and inflation) and Corporate Finance (NPV, discount rate, cost of capital, etc.).
- Thorough knowledge of exchange rate regimes, the impossible triangle in international economics and the history of RMB exchange rate reform
- Understanding of the Purchasing Power Parity and Interest Rate Parity and how they respectively affect multinational firms’ global competitiveness and cost of capital
- Different types of foreign exchange exposure and basic approaches in managing them
- The rationale that MNEs adjust investment, financing and operational arrangements in a global business environment and political environment
- Ability to identify currency over/undervaluation based on simple PPP
- Ability to design foreign exchange risk hedging plans for accounts receivable/payable
- Ability to incorporate FX risk and political risk in assessing overseas investment decision
- Ability to incorporate FX risk and political risk management in financing overseas investments
- Ability to construct simple SPV structure in MNE’s global tax planning
- Respect for the market competition, corporate governance and business ethnics in a global environment
Day 1. Lecture
- What is Special in Multinational Financial Management
- International Monetary System and the “Impossible Trinity”
- Class Discussion 1: Bitcoin, Libra by Facebook and DCEP by PBoC
- Illustrative Case 1: A Story of Two Countries and Two Assets
- Chinese Yuan Exchange Rate Regime in the “Impossible Trinity”
- Purchasing Power Parity and Interest Rate Parity
- Class Discussion 2: You Don’t Eat Hamburgers to Live in Shanghai
Day 2: Lecture and Classroom Case Discussion
- Foreign Exchange Markets and Quotes
- RMB Offshore Markets and RMB Internationalization
- Definition and Categories of Foreign Exchange Exposure
- Measuring and Managing Transaction Exposure
- Illustrative Case 2：Hedging Practice of Chinese Mineral Importer A
- Measuring Economic Exposure
Day 3: Lecture and Classroom Case Discussion
- Classroom Discussion of Case 2 (also covers Business Ethics in MNEs)
- FDI, Modes of Entry and Access Political Risk in Chinses Firms’ Overseas Investment
- Illustrative Case 3: TPS’s Transplanting in Southeast Asia(Also covers Business Ethics in MNEs)
- Overview of Global Financing: Bond and Equity Markets
- Overseas Listing of Chinese Firms: VIE Structure and new regulations from both the US and the Chinese governments
- Global Taxation: Tax-planning, Transfer Pricing and Tax Inversion
- BEPS and New Trends in Global Taxation System (by TA, also covers Business Ethics in MNEs))
Day 4. Lecture and Group Presentations
- Student Group Presentations
- Mentoring Group Presentations
1 ECTS credit corresponds to a workload of 26-30 hours.
The course is 4 days and consists of lectures, classroom case discussions and group presentations, in total 32 hours. The group presentation is to analyze one real company on one specific issue relating to its global investment, financing, operating or risk management.
2 of the teaching hours are dedicated to CSR, ethics, social and environmental issues.
This is a course with continuous assessment (several exam components) and one final exam code. Each exam component will be graded using points on a scale 0 -100. The components will be weighted together according to the information in the course description in order to calculate the final letter grade for the course. Students who fail to participate in one/some/all exam components will get a lower grade or may fail the course. Candidates may be called in for an oral hearing as a verification/control of written assignments.
Specific information regarding the points system and the mapping scale beyond the information given in the course description will be provided in class. This information may be relevant for requirements for term papers or other hand-ins, and/or where class participation can be one of several elements of the overall evaluation.
Specific Information regarding any aspect of student evaluation will be provided in class. It is the student's responsibility to obtain this information. Please note that whilst attendance is not compulsory, it is the student's responsibility to obtain any information provided in class that is not included on the course homepage/it's learning or text book. Homepages and/or it's learning are not designed for the purpose of students who choose not to attend class.
The course is a part of a full MBA and examination in all courses in the MBA programme must be passed in order to obtain a certificate for the MBA degree.
In all BI Executive courses and programmes, there is a mutual requirement
for the student and the course responsible regarding the involvement of the student's experience in the planning and implementation of courses, modules and programmes. This means that the student has the right and duty to get involved with their own knowledge and practice relevance, through the active sharing of their relevant experience and knowledge.
Granted admission to the BI-Fudan MBA programme. Please consult our student regulations.
Disclaimer
Deviations in teaching and exams may occur if external conditions or unforeseen events call for this.
| Assessments |
|---|
Exam category: Submission Form of assessment: Written submission Weight: 40 Grouping: Group (1 - 6) Duration: 1 Semester(s) Comment: Case analysis/written case report, counts 40% of the total grade. Exam code: MBA 24233 Grading scale: ECTS Resit: Examination when next scheduled course |
Exam category: Submission Form of assessment: Written submission Invigilation Weight: 60 Grouping: Individual Support materials:
Duration: 2 Hour(s) Comment: Written exam, counts 60% of the total grade. Exam code: MBA 24234 Grading scale: ECTS Resit: Examination when next scheduled course |
All exams must be passed to get a grade in this course.
| Activity | Duration | Comment |
|---|---|---|
Teaching | 24 Hour(s) | |
Prepare for teaching | 30 Hour(s) | |
Student's own work with learning resources | 56 Hour(s) |
A course of 1 ECTS credit corresponds to a workload of 26-30 hours. Therefore a course of 4 ECTS credit corresponds to a workload of at least 110 hours.