Ojectives

The course aims to provide the concepts, methodologies and tools needed by multinational companies in order to make effective financing and investment decisions.
Upon completion of the course the student will be able to understand the main issues and decision processes which constitute the financial management of a multinational firm, namely:

(1) the financing decision, and
(2) the management of exchange rate risk.

The student will also develop the ability to apply the models covered in the course to operational problems (currency risk hedging, effective cost of foreign exchange financing).

Pre-requirements

Knowledge of the essentials of basic corporate finance is a prerequisite for attending the course.

Contents

The course applies the valuation models which are typical of corporate finance to understand the financial value chain of multinational corporations (MNCs) in international contexts. The course opens by focusing on the international financial environment and exchange rate risk management. The final part deals with financing decisions.
The main topics covered in the course are the following:

• international financial markets;
• exchange rate behaviour;
• exchange rate risk management;
• long-term financing;
• short-term financing;
• case studies exemplifying the application of the theory and methodologies to real world examples.

Teaching and learning methods

The course plan (52 hours) is divided into:

• 24 hours, lectures, where the main concepts are explained and exemplified with the help of slides;
• 20 hours, exercise class, where the evaluation models treated in the course are applied to simple practical problems;
• 8 hours, case studies, where a field expert will present some real-life business cases covering the main topics of the course.

The student will also participate to a group project aimed at producing a report on the financial management of a company with international (see below the section on evaluation criteria for more detail).
Assistance to group projects is provided by the course's tutor
Attendance is recommended.

Evaluation of learning

The final grade (ranging from 1 to 30, according to the Italian University system) will depend on the following components:

• 70% final written exam;
• 30% group project.

The written exam will have the following structure:

Theoretical questions

• 2 simple questions (4 points each);
• 1 advanced question (7 points).

Exercises

• 2 simple exercises (4 points each);
• 1 advanced exercise (6 points).

In order to prepare the written exam, students will find sample questions at the end of each chapter of the textbook:

• "Self test" and "Questions and applications" for simple questions and exercises
• "Advanced questions" for advanced questions and exercises;
• in the exercise class the most relevant exercises will be proposed;
• the advanced exercise may be based also on the examples presented as case studies in the class.

The group project is aimed at producing a report on the financial management of a company with international operations listed on the Italian Stock Exchange or other stock markets:

• each case will be assigned to a group of 2 or 3 persons;
• group work will be based upon the analysis of the financial reports (last 3 years) of the chosen company, and will require the application of the models explained during the course;
• the discussion of case studies in the class will provide the skills for data research and analysis needed in group projects;
• the tutor will provide assistance;
• the project report must be delivered before the last date of the written exam in the winter session;
• additional directions will be provided in the course site available on the http://comunitaonline.unitn.it portal.

Texts

Jeff Madura and Roland Fox (2020), International Financial Management, 5th edition, Cengage Learning:

• the book can be purchased online (paper, e-book, single chapters) at https://www.cengage.co.uk/books/9781473725508/

Additional readings and material for case studies provided on the course site (see below).