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Dr Gaur Hari Singhania Institute of Management and Research, Kanpur.

International Financial Management


For Investment Wealth and Insurance Students

Faculty: Prof. V K Murti


5th Trimester Full Time; Batch: 2008/10
Text Book: Multinational Business Finance.
Author: David K. Eiteman, Arthur I. Stonehill. Michael H Moffett, Alok Pandey
Publisher: Pearson Education, 10th edition.

Objectives:

Aim of the course is to explain the complexities of Financial Decisions in the context of
a Multinational Firm with practical examples. Focus will be more on Practical examples
so that complete clarity of the concepts is attained. A Management Graduate specialized
in Finance is supposed to know the techniques of Analyzing the Financial Scenarios be it
related to Risk Management, Capital Budgeting (or investment decisions).

Tutorial Schedule

Unit Particulars Ch. No/ Page Lecture


No. Nos. No.
1 Global Financial Environment Ch 1
What is different about Global Financial Pg 2~3 1
Management
Case: Corporate Governance at Brasil Pg 29 2
Telecom
2 Balance of Payment Ch 3
Meaning and importance of BOP. 3
Components of BOP.
Exercise: A tourists transactions on BOP.
India’s BOP – A review 4
India’s BOP – A review continued 5
US Balance of Payment – A review 6
3 Interest Rate Risk Management Ppts and xl.
Sheets on
server
What is Interest Rate Risk? 7
Yield and Market Rate 8
Concepts of Duration and Convexity 9
Interest Rate Futures 10
Interest Rate FRAs: Short Term Interest 11
Rate Risk Management
4 Operating Exposures
Operating Exposure, Economic Ch 9 12
Exposure, Competitive Exposure or
Strategic Exposure.
Case: Toyota’s European Operating Pg 309-312 13
Exposure
Case: Toyota’s European Operating 14
Exposure: : continued
5 Foreign Direct Investment Ch 15
Theory of Comparative Theory: Pg 483 15
Numerical example of Brazil and
Thailand
Limitations of Comparative advantage Pg 486 16
The OLI Paradigm and Pg 493 17
Internationalization
Case: FDI by ONGC of India Pg 506 18
6 Political Risk Ch 16
Predicting Firm-specific risk, Country- Pg 508-10 19
specific risk and Global-specific risk.
Case: The case of Starbucks Pg 528-532 20
Case: The case of Starbucks continued 21
7 Capital Budgeting Ch 18
Review of basics 22
IRR vs NPV and Modified IRR 23
Complexities of budgeting for a foreign Pg 578 24
project
Strategic Real Options Pg 277-283/ I 25
M Pandey
Value of a patent: case of L&T 26
Case: Cemex Enters India Pg 580-592 27
Case: Cemex Enters India continued 28

Structure of Internal Assessment

Component Weight in Weight in Marks


percentage (out of 60)
Attendance 5% 3
Class Test-1 20% 12
Assignments 50% 30
Class room interaction and 25% 15
participation
Total 100% 60

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