BUS-F571 International Corporate Finance

• 7 weeks
• 1.5 credits
• Prerequisite(s): BUS-F520 or Concurrent Enrollment

F571 investigates the unique features of corporate finance that arise when a firm’s activities cross international borders. International markets are segmented, and this lack of integration introduces both problems and opportunities. Some of the questions we will address are:

• How should one manage the risks brought about by uncertain foreign exchange rates?
• How can a manager minimize receivables risk when granting trade credit to a foreign customer?
• How do firms finance international trade?
• How does uncertainty in foreign exchange rates affect our capital budgeting practice?
• How do sovereign and country risks affect our capital budgeting practice?
• Do segmented markets create opportunities to create value through careful financing decisions?

We will analyze these questions predominantly via case study analysis and discussion.

By the end of the course, students should understand the following:

• The rationales for hedging foreign exchange risk along with the basic techniques for doing so;
• the basics of trade finance in exporting;
• the standard technique for handling exchange rates in international capital budgeting;
• the appropriate methods for incorporating sovereign and country risks into capital budgeting decisions; and
• how lack of integration in capital markets leads to opportunities to create value with creative use of corporate finance.