International Financial Management
Run by Bangor Business School
15.000 Credits or 7.500 ECTS Credits
Organiser: Prof Lynn Hodgkinson
Overall aims and purpose
To analyse the financial management of multinational companies, and the influence of the macroeconomic, fiscal, currency and political environments on financial decision-making.
The financial management of multinational companies (MNCs). The impact of macroeconomic, fiscal, currency and political environments on MNCs. Determinants of exchange rates, and purchasing power and interest rate parity. Management of exchange rate exposure through forwards, options and money market contracts. Corporate financing decisions including sourcing funds from overseas and identifying costs of capital; capital investment appraisal; working capital management and the positioning of funds in the MNC.
A basic knowledge of course material.
In addition to the above, an ability to write analytically on specific issues.
In addition to the above, the ability to illustrate and enhance arguments and analyses through the use of relevant supporting evidence drawn from the established literature and real-life examples.
Analyse the factors that influence the evaluation and implementation of international investment projects.
Evaluate the impact of interest rates and inflation rates on exchange rates and the usefulness of the parity relationships.
Assess transaction and economic currency exposures and their management using external (derivatives and money markets) and internal techniques.
Evaluate the implications of the globalisation of financial markets for the financial management of multinational companies.
Teaching and Learning Strategy
case studies and numerical workshops
private study: preparation and revision
- Literacy - Proficiency in reading and writing through a variety of media
- Numeracy - Proficiency in using numbers at appropriate levels of accuracy
- Computer Literacy - Proficiency in using a varied range of computer software
- Self-Management - Able to work unsupervised in an efficient, punctual and structured manner. To examine the outcomes of tasks and events, and judge levels of quality and importance
- Exploring - Able to investigate, research and consider alternatives
- Information retrieval - Able to access different and multiple sources of information
- Inter-personal - Able to question, actively listen, examine given answers and interact sensitevely with others
- Critical analysis & Problem Solving - Able to deconstruct and analyse problems or complex situations. To find solutions to problems through analyses and exploration of all possibilities using appropriate methods, rescources and creativity.
- Presentation - Able to clearly present information and explanations to an audience. Through the written or oral mode of communication accurately and concisely.
- Teamwork - Able to constructively cooperate with others on a common task, and/or be part of a day-to-day working team
- Argument - Able to put forward, debate and justify an opinion or a course of action, with an individual or in a wider group setting
Subject specific skills
- knowledge of theories and empirical evidence concerning financial management, risk and the operation of capital markets (in cases of degrees with significant finance content).
- Abstraction. From the study of economic principles and models, students see how one can abstract the essential features of complex systems and provide a useable framework for evaluation and assessment of the effects of policy or other exogenous events. Through this, the typical student will acquire proficiency in how to simplify while still retaining relevance. This is an approach that they can then apply in other contexts, thereby becoming more effective problem-solvers and decision-makers.
- An appreciation of the nature of the contexts in which finance can be seen as operating, including knowledge of the institutional framework necessary for understanding the role, operation and function of markets and financial institutions (e.g. the economic, legal, regulatory and tax environment, both national and international; the firm; the capital markets and the public sector).
- A knowledge of the major theoretical tools and theories of finance, and their relevance and application to theoretical and practical problems (e.g. concept of arbitrage and examples of its use; financial mathematics and capital budgeting criteria; informational efficiency; optimal risk sharing; portfolio theory; asset pricing models and the valuation of securities; cost of capital; derivative pricing; risk management; information asymmetry; principal agency relationships; signalling; Fisher separation and capital budgeting criteria; behavioural finance; term structure and the movement of interest rates; determination of exchange rates and financial intermediation).
- An understanding of the financing arrangements and governance structures of business entities, and an appreciation of how theory and evidence can be combined to assess the effectiveness and efficiency of such arrangements (e.g. decisions as to sources of finance and financial structure; the pricing of corporate securities; the market for corporate control; corporate governance structures and mechanisms; financial planning and international dimensions of finance).
- Problem solving and critical analysis: analysing facts and circumstances to determine the cause of a problem and identifying and selecting appropriate solutions.
- Communication and listening including the ability to produce clear, structured business communications in a variety of media.
Talis Reading listhttp://readinglists.bangor.ac.uk/modules/abj-4405.html
Moffett, M. H, A. I Stonehill and D. K Eiteman (2016) Fundamentals of Multinational Finance, 5/E, Pearson Education. (MSE 2016) An electronic (and cheaper) version of the textbook is available at https://www.vitalsource.com/en-uk/products/fundamentals-of-multinational-finance-global-michael-h-moffett-v9781292076546
Details of newspaper articles discussing real-life examples of our discussions during the module as well as some journal articles will be provided during the module.