Master
2019/2020
International Finance (advanced level)
Category 'Best Course for Career Development'
Category 'Best Course for Broadening Horizons and Diversity of Knowledge and Skills'
Type:
Elective course (Master of International Business)
Area of studies:
Management
Delivered by:
Магистерская программа "Международный бизнес", направление подготовки "Менеджмент"
When:
2 year, 1, 2 module
Mode of studies:
offline
Instructors:
Irina Kratko
Master’s programme:
International Business
Language:
English
ECTS credits:
4
Contact hours:
40
Course Syllabus
Abstract
The course syllabus sets minimal requirements for student’s knowledge and skills and determines the content and forms of study and performance evaluation. International Finance (Advanced) is a second and advanced step in studying and exploring the principles of corporate financial management in multinational corporations. Prior to attending to the course, it is compulsory to attend International Corporate Finance and Introduction to Financial and Managerial Accounting with minimum score of 50 out 100 in both disciplines. The syllabus is developed according to the standard educational requirements of the Federal State Autonomous Educational Institution of Higher Education «National Research University «Higher School of Economics» (HSE) for the Degree code 38.04.02 "Management".
Learning Objectives
- To provide students with the advanced understanding of principles of financial management in multinational corporations and the role of financial manager in a multinational corporation
- To describe the concepts of key risks of the multinational corporation. Country risks, macroeconomic risks, currency / exchange rate risks, industry specific risks. Risk management in corporations and insurance. Special focus on currency risks and their mitigation tools. Translation risks and transaction risks, hedging instruments and policies. Commodities cost exposures and related hedging policies. Application of options in corporate finance
- Advanced analysis of financial statements. Concepts of organic growth and adjusted earnings. Reconciliation of organic and reported growth, adjusted and reported earnings. Consolidation of financial statements in different currencies. Asset valuation and impairment concepts. Business analysis, consumption drivers analysis in connection to financial statements
- Advanced study of the key sources of value creation in multinational corporations. BCG matrix in product portfolio analysis. Focus on mergers and acquisitions as value creation activities. Internal drivers of growth and value creation. To introduce students to real cases of acquisitions with detailed analysis of value creation drivers
- Long-term financing decisions. Raising equity capital, venture capital participation, joint ventures, going to IPO. Debt financing, bank loans and syndicated credits, convertible bonds, foreign currency bonds. Capital structure and payout policy.
Expected Learning Outcomes
- know the definition of public corporations
- learn how to do the advanced analysis of financial statements
Course Contents
- International (multinational) public corporationsInternational (multinational) public corporations. Corporate structures, decision-making process in multinational corporations, authority levels and segregation of authority. Comparable analysis of public multinational corporations versus privately owned international businesses. Principles of financial management in international corporations. Role of financial manager in international corporations; role of CFO; key business stakeholders. Corporate conflicts and conflicts resolutions. Corporate governance. Role of board of directors and BOD committees. Compliance and integrity rules towards external and internal regulations, business ethics and right business practices.
- Risk managementRisk measuring and risk management in financial management, concept and practical application. Key risks of the multinational corporation. Country risks, macroeconomic risks, currency / exchange rate risks, industry specific risks. Risk management in corporations, insurance. Actuarially fair premium concept.
- Currency risks and mitigation policies and toolsDeep dive into currency risks and mitigation policies and tools. Translation risks and transaction risks, hedging instruments and hedging policies. Commodities cost exposures and related hedging policies. Application of options in corporate finance.
- Advanced analysis of financial statementsAdvanced analysis of financial statements. Refreshment of theory – second look at income statement, balance sheet and cash flow. Reading the statements, vertical and horizontal analysis, financial ratios analysis. Concepts of organic growth and adjusted earnings versus reported financials. Reconciliation of organic and reported growth, adjusted and reported earnings.
- Business analysisConsolidation of financial statements in different currencies. Impact of translation forex. Asset valuation and impairment concepts. Business analysis, consumption drivers analysis in connection to financial statements.
- Value creationValue creation tree and sources of value creation. Markets and products portfolio analysis, application of BCG matrix in value analysis. Internal drivers of growth and value creation. Pricing opportunities, cost reduction and cost efficiencies opportunities.
- Mergers & acquisitionsMergers & acquisitions and related synergies as a source of value creation. De-mergers and spin-off cases. Restructuring accounting and its interpretation in corporate finance reporting.
- Cost of equity capitalRevision topics: Cost of equity capital. Risk and return concepts and capital asset pricing model. Cost of debt and cost of equity calculations, weighted average cost of capital concept and calculation.
- Capital structure and long-term financing decisionsCapital structure and long-term financing decisions for international corporations. Raising equity capital, venture capital participation, joint ventures, going to IPO and SPO. Debt financing, bank loans and syndicated credits, convertible bonds, foreign currency bonds (Eurobonds). Corporate bonds market. Capital structure and payout policy.
Interim Assessment
- Interim assessment (2 module)0.2 * Cases + 0.3 * Class participation + 0.3 * Final exam + 0.2 * Intermediary test
Bibliography
Recommended Core Bibliography
- Berk, J. B., & DeMarzo, P. M. (2014). Corporate Finance: The Core, Global Edition (Vol. Third edition). Boston: Pearson. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=1417990
- Corporate Finance : Theory and Practice Vernimmen, Pierre; Quiry, Pascal;and more John Wiley & Sons, Incorporated 2014 ISBN: ISBN number:9781118849330, ISBN number:9781118849323
Recommended Additional Bibliography
- Advances in Mergers and Acquisitions Cooper, Cary L.; Finkelstein, Sydney Emerald Publishing Limited 2015 ISBN: ISBN number:9781785600913, ISBN number:9781785600906 SERIES: Advances in Mergers and Acquisitions Ser.