Mba Financial Management
International Financial Management
International Financial Management
INTRODUCTION
Halil Kiymaz, Ph.D., CFA Bank of America Chair and Professor of Finance
ROAD MAP TO INT FINANCE
KEY ISSUES
ROAD MAP TO INT FINANCE
CASES
Global Financial Environment
-Why to study Int. Finance?
-Int. Monetary System -The Balance of Payments
Foreign Exchange Market
-Foreign Exchange Market
-How do we determine FX? Any risk? -International Parity Conditions -FX Derivatives
Foreign Exchange Market
1. Hedging Currency Risk at AIFS
Foreign Exchange Risk Management
-Transaction Exposure
-Operating Exposure -Accounting Exposure
Foreign Exchange Exposure and Management
2. Foreign Exchange Hedging Strategies at General Motors: Competitive Exposures
Financing Global Firms Foreign Investment Decisions
-How to raise money internationally?
-Global Cost of Capital -Interest Rate and Currency Swaps
Financing Global Firms Foreign Investment Decisions
3. Costs of Capital and Capital Budgeting at AES
-Political Risk Management
-Multinational Capital Budgeting
4. Nestle and Alcon—The Value of Listing
Introduction
Why is it important to study international finance? Distinguish international finance from domestic finance Multinational Corporation? What’s special about “International” Finance? What are the goals?
Why do we study international finance?
Globalization has changed the scope and activities of firms of any size Share of corporate profits attributable to foreign operations increased from 4% 1950s to 24% in 2000s.
Similar trends are observed in sales and investments
Firms increasingly rely on integrated foreign operations
1
Growing Importance of Foreign Profits to Corporate Profits, 1950-2004
.2 4 .2 0 .1 6 .1 2 .0 8 .0 4 .0 0 55 60 65 70 75 80 85 90 95 00
A recent article from WSJ… Divided by a Two-Track Economy
September 7, 2010
PERC ENT
Source: NIPA tables available at
International Financial Management
INTRODUCTION
Halil Kiymaz, Ph.D., CFA Bank of America Chair and Professor of Finance
ROAD MAP TO INT FINANCE
KEY ISSUES
ROAD MAP TO INT FINANCE
CASES
Global Financial Environment
-Why to study Int. Finance?
-Int. Monetary System -The Balance of Payments
Foreign Exchange Market
-Foreign Exchange Market
-How do we determine FX? Any risk? -International Parity Conditions -FX Derivatives
Foreign Exchange Market
1. Hedging Currency Risk at AIFS
Foreign Exchange Risk Management
-Transaction Exposure
-Operating Exposure -Accounting Exposure
Foreign Exchange Exposure and Management
2. Foreign Exchange Hedging Strategies at General Motors: Competitive Exposures
Financing Global Firms Foreign Investment Decisions
-How to raise money internationally?
-Global Cost of Capital -Interest Rate and Currency Swaps
Financing Global Firms Foreign Investment Decisions
3. Costs of Capital and Capital Budgeting at AES
-Political Risk Management
-Multinational Capital Budgeting
4. Nestle and Alcon—The Value of Listing
Introduction
Why is it important to study international finance? Distinguish international finance from domestic finance Multinational Corporation? What’s special about “International” Finance? What are the goals?
Why do we study international finance?
Globalization has changed the scope and activities of firms of any size Share of corporate profits attributable to foreign operations increased from 4% 1950s to 24% in 2000s.
Similar trends are observed in sales and investments
Firms increasingly rely on integrated foreign operations
1
Growing Importance of Foreign Profits to Corporate Profits, 1950-2004
.2 4 .2 0 .1 6 .1 2 .0 8 .0 4 .0 0 55 60 65 70 75 80 85 90 95 00
A recent article from WSJ… Divided by a Two-Track Economy
September 7, 2010
PERC ENT
Source: NIPA tables available at