International Corporate Finance
FINANCE 4324 - 002
International Corporate Finance
Spring 2011
Monday-Wednesday 5:30 – 6:50 p.m., Room 252 B
Dr. Peggy E. Swanson
Office: 625B
Phone: 272-3841
e-mail:
https://wweb.uta.edu/faculty/swanson
Office Hours:
Monday and Wednesday 4:00 – 5:00 p.m.
Other times available by appointment
I.Course Description
International Corporate Finance (3-0). Issues and questions which concern financial management of international corporations. Analysis of the financing of investment abroad and the management of assets in differing financial environments. The foreign investment decision, cost of capital and financial structure for multinational decision making, management of foreign subsidiary working capital, and financial control of multinational operations.
II.Prerequisite
FINA 3313
III. Objectives of the Course and Student Learning Outcomes
This course introduces the student to the international aspects of corporate finance, including such topics as the international monetary system, balance of payments, foreign exchange markets, international parity conditions, foreign exchange exposure, global financing, foreign investment, political risk, multinational capital budgeting, and financing international trade. At the conclusion of the course, the students will be able to:
1. evaluate international monetary systems,
2. analyze the role foreign exchange markets in international operations
3. describe measurement and implications of foreign exchange exposure and political risk
4. identify unique financial characteristics of multinational firms as opposed to domestic firms.
IV.Text (Required)
Cheol Eun and Bruce Resnick, International Financial Management, 5th edition, McGraw Hill, 2009
V.Policies and Procedures
The student is responsible for all material covered and all information disseminated when he/she misses a class or arrives late. This includes additional assignments made during class and practice problem sets distributed in class. There will be three tests during the semester—two interim tests and a final examination. All tests will be of equal weight, and no make-up exams will be given. Any student missing an exam must confer with the professor before (not after) the scheduled exam date to determine the consequences of the missed exam. Letter grades will be assigned as follows:
90 – 100A
80 - 89B
70 - 79C
60 - 69D
0 - 59F
NOTE: All cell phones must be turned off and out of sight during class. A student with a visible cell phone or other electronic device other than a stand-alone calculator during an exam will not be allowed to complete the exam and will receive a grade of zero for the exam. Also any student arriving 15 minutes or more late on exam day (including final exam) will not be allowed to take the exam.
- Progression of Course
Week 1 – January 19
Chapter 1 – Globalization and the Multinational Firm
Questions 2, 3, 4, 6
Chapter 2 – International Monetary System
Questions 2, 3, 4, 6, 7, 9
Week 2 – January 24 and 26
Chapter 2 – Continued
Week 3 – January 31 and February 2
Chapter 3 -- Balance of Payments
Questions 1, 2, 3, 4, 10
Chapter 4 – Corporate Governance around the World (agency issues)—skip
Chapter 5 -- The Market for Foreign Exchange
Questions 2, 3, 7, 8, 9,10
Problems 1, 4, 5, 6, 9, 11
February 2 – Census Date
Week 4 – February 7 and 9
Chapter 5 – Continued
Week 5 – February 14 and 16
Chapter 6 -- International Parity Relationships and Forecasting Foreign Exchange Rates
Questions 3, 4, 6, 8
Problems 1, 3, 4, 5, 6
Test I – February 16
Week 6 – February 21 and 23
Chapter 7 - Futures and Options on Foreign Exchange (skip pp. 181-185)
Questions 1, 2, 3, 5, 6
Problems 1, 4, 8
Week 7 – February 28 and March 2
Chapter 8 - Management of Transaction Exposure
Questions 1, 2, 3, 4, 5, 6, 7, 9, 10
Problems 1, 2 (a only), 3 (a and b only), 4, 5
Week 8 – March 7 and 9
Chapter 8 - Continued
Chapter 9 - Management of Economic Exposure
Questions 1, 3, 5, 6, 7, 11
March 14 – 18—Spring Break
Week 9 – March 21 and 23
Chapter 10 - Management of Translation Exposure (omit mini case)
Questions 1, 4, 5
Chapter 11 - International Banking and Money Market
Questions 2, 3, 5
Problems 1, 6
Test II March 23
Week 10 – March 28 and 30
Chapter 11 - Continued
Chapter 12 - International Bond Market
Questions 1, 3, 4, 7
Problems 1, 2
April 1 - Last day to drop classes
Week 11 – April 4 and 6
Chapter 13 - International Equity Markets (Scan)
Questions 4, 5
Chapter 14 - Interest Rate and Currency Swaps. "Types of Swaps" and "Currency Swaps" only
Questions 3, 4
Chapter 15 - International Portfolio Investments
Questions 1, 2, 4, 5, 6, 7, 9, 10, 11, 12
Problems 1, 2
April 11-15 – Business Week
Week 12 – April 11 and 13
Chapter 16 - Foreign Direct Investment and Cross-Border Acquisitions
Questions 2, 3, 7, 8, 11, 12, 13, 16
Chapter 17 - International Capital Structure and the Cost of Capital
Questions 2, 6, 9, 12, 13
Problems 2, 3 (assume kRF = 5%)
Week 13 – April 18 and 20
Chapter 18 - International Capital Budgeting
Questions 1, 2, 3, 5, 6, 9, 11, 12
Problems 2, 3 (a only)
Chapter 19 - Multinational Cash Management
Questions 1, 2
Week 14 – April 25 and 27
Chapter 20 – International Trade Finance
Questions 1, 2, 3, 4, 6
Chapter 21 - International Tax Environment
Questions 1, 2, 3, 4, 5, 6, 7, 8
Problem 4
Week 15 – May 2 and 4
Summary and Review
Final Examination – Monday, May 9, 5:30 – 8:00 p.m.
Syllabus Addendum
Academic Integrity:
It is the philosophy of The University of Texas at Arlington that academic dishonesty is a completely unacceptable mode of conduct and will not be tolerated in any form. All persons involved in academic dishonesty will be disciplined in accordance with University regulations and procedures. Discipline may include suspension or expulsion from the University.
“Scholastic dishonesty includes but is not limited to cheating, plagiarism, collusion, the submission for credit of any work or materials that are attributable in whole or in part to another person, taking an examination for another person, any act designed to give unfair advantage to a student or the attempt to commit such acts.” (Regents’ Rules and Regulations, Series 50101, Section 2.2)
Americans with Disabilities Act (ADA):
The University of Texas at Arlington is on record as being committed to both the spirit and letter of the federal equal opportunity legislation; reference Public Law 92-112 – The Rehabilitation Act of 1973 as amended. With the passage of federal legislation entitled Americans with Disabilities Act (ADA), pursuant to section 504 of the Rehabilitation Act, there is renewed focus on providing this population with the same opportunities enjoyed by all citizens.
If you require an accommodation based on disability, please meet with me in my office during the first week of the semester to make sure you are appropriately accommodated. You will need to provide authorized documentation through designated administrative channels. Information regarding specific diagnostic criteria and policies for obtaining academic accommodations can be found at www.uta.edu/disability. Also, you may visit the Office for Students with Disabilities in room 102 of University Hall or call them at (817) 272-3364.
Attendance Policy:
Students are expected to attend each class and students are expected to come to each class with their assignments completed. Students who must miss a class are responsible for securing any and all assignments for coursework missed.
Drop Policy:
See University drop policy.
Grade Distributions:
The distribution of grades for the semester will normally adhere to the guidelines of the Department of Finance and Real Estate. These guidelines are generally based on College of Business Administration averages for similar courses.
Food/Drink in Classrooms:
College policy prohibits food and/or drinks in classrooms and labs. Anyone bringing food and/or drinks into a classroom or lab will be required to remove such items, as directed by the class instructor or lab instructor.
Student Support Services Available and Library Information:
The University of Texas at Arlington supports a variety of student success programs to help you connect with the University and achieve academic success. These programs include learning assistance, developmental education, advising and mentoring, admission and transition, and federally funded programs. Students requiring assistance academically, personally, or socially should contact the Office of Student Success Programs at 817-272-6107 for more information and appropriate referrals.
We have two library liaisons: Ruthie Brock is one and she can be reached at (817) 272-7152, and by email at . Carol Byrne is the other and she can be reached at (817) 272-7437, and by email at . You will find useful research information for finance at http://www.uta.edu/library/research/rt-fina.html.
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