F571 – International Corporate Finance
Indiana University Kokomo
Summer 2009
Dr. Steven Cox
Time:
5:45 – 9:00, Tuesdays and Thursdays (June 30 – August 11)
Room:
KO 112
Office Hours:
4:45 - 5:45, Tuesdays and Thursdays (and by appointment and walk in)
Office:
KO 174J
Work Phone:
(765) 455-9314
Mobile Phone:
(317) 696-0571
Email:
scox@iuk.edu
Web Site:
http://www.iuk.edu/~bussrc/
Required Text:
Madura, International Financial Management, Abridged 9th Edition
Course Objectives
This course is designed to provide an understanding of the international environment in which
firms and individuals operate and an introduction to international financial management. The
course will include an overview of the international financial markets and the relationship
between these markets. Students will learn the factors that influence exchange rates and how
exchange rates affect trade, why countries adopt a particular exchange rate system and the
implications of this decision, and how international arbitrage links prices, exchange rates and
interest rates around the world. The course will examine how firms manage the risks of doing
business internationally using financial instruments such as forward, futures, and options
contracts. The course will examine international investment decisions, and how firms finance
their projects in international capital markets.
Grading
Midterm Exam
Final Exam
Case Presentation
Attendance
Country Paper and Presentation
Total Points
1
150
150
50
50
100
500
Grading Scale
96% - 100%
86% - 89%
76% - 79%
66% - 69%
Below 59%
A+
B+
C+
D+
F
90% - 96%
80% - 86%
70% - 76%
60% - 66%
A
B
C
D
89% - 90%
79% - 80%
69% - 70%
59% - 60%
ABCD-
Exams
Unexcused absences will result in zeros on exams. Exams may be a combination of multiple
choice, problems, and short essays. The midterm exam will be on July 21st. The final exam will
be on August 11th.
Attendance
For each of the eleven non-exam evenings, five points will be awarded for attendance with a
maximum points set at 50. Partial attendance will result in partial points.
Case Presentation
Students will lead the discussion of the end of the chapter case relating to Blades, Inc. The first
part of the presentation should include an approximately ten minute review of the case situation
and requirements. The next (approximately 20 minutes) will be spent leading the class through
an analysis of the case that includes solutions. Leading the case presentation is worth 50 points.
Points will be awarded based on the quality of the analysis, the presentation style, and the ability
to engage the rest of the class in the process.
Country Paper and Presentation
Each student will investigate the impact of the current recession on a country other than the
United States. The investigation should include factors that made the country more or less
vulnerable to the decline and the prognosis for recovery. Special emphasis should be placed on
unemployment and production figures, the impact on the country’s currency, the actions taken by
the country’s central bank, government incentive programs, prospects for inflation, etc. The
result should be a 5–7 page paper and a 15-minute class presentation. The overall project is
worth 100 points. The presentation will be worth 30 points. The layout, organization, spelling,
and grammar will be worth 30 points. The remaining 40 points will be allocated to the finance
content. The paper is due by the class period following the presentation.
2
Course Schedule
Chapter
1
2
3
4
5
6
7
8
10
11
12
13
14
16
Topics and Presentations
Multinational Financial Management
International Flow of Funds
International Financial Markets
Exchange Rate Determination
(Blades, Inc. Chapter 1) (Blades, Inc. Chapter 2)
(MBA Country Presentation)
Currency Derivatives
(Blades, Inc. Chapter 3) (Blades, Inc. Chapter 4)
(MBA Country Presentation)
Government Influence of Exchange Rates
(Blades, Inc. Chapter 5) (Blades, Inc. Chapter 6)
(MBA Country Presentation)
International Arbitrage and Interest Rate Parity
(Blades, Inc. Chapter 7)
(MBA Country Presentation)
Date
June 30
Midterm Exam
July 21
Relationships among Inflation, Interest Rates, and Exchange Rates
(Blades, Inc. Chapter 8)
(MBA Country Presentation)
Measuring Exposure to Exchange Rate Fluctuations
(Blades, Inc. Chapter 9) (Blades, Inc. Chapter 10)
(MBA Country Presentation)
Managing Transaction Exposure
(Blades, Inc. Chapter 11)
(MBA Country Presentation)
Managing Economic Exposure and Translation Exposure
Direct Foreign Investment
(Blades, Inc. Chapter 12) (Blades, Inc. Chapter 13)
(MBA Country Presentation)
Multinational Capital Budgeting
Country Risk Analysis
(Blades, Inc. Chapter 14) (Blades, Inc. Chapter 16)
(MBA Country Presentation)
July 23
Final Exam
Aug 11
3
July 2
July 7
July 9
July 14
July 16
July 28
July 30
Aug 4
Aug 6
Schedule of Presenters (to be determined on June 30)
Date
July 7
July 9
July 14
July 16
July 23
July 28
July 30
Aug 4
Aug 6
Topic
(Blades, Inc. Chapter 1)
(Blades, Inc. Chapter 2)
MBA Country Presentation (Blades, Inc. Chapter 3)
(Blades, Inc. Chapter 4)
MBA Country Presentation (Blades, Inc. Chapter 5)
(Blades, Inc. Chapter 6)
MBA Country Presentation (Blades, Inc. Chapter 7)
MBA Country Presentation (Blades, Inc. Chapter 8)
MBA Country Presentation (Blades, Inc. Chapter 9)
(Blades, Inc. Chapter 10)
MBA Country Presentation (Blades, Inc. Chapter 11)
MBA Country Presentation (Blades, Inc. Chapter 12)
(Blades, Inc. Chapter 13)
MBA Country Presentation (Blades, Inc. Chapter 14)
(Blades, Inc. Chapter 16)
MBA Country Presentation -
Student
4