International Finance

AY2014/2015 Semester 1

Many companies engage in cross-border business and they face important financial questions beyond those found in a purely domestic setting. This course aims at providing the necessary understanding and tools to evaluate, finance, and manage international business. The issues and tools discuss are particularly relevant in the context of a country like Singapore which is a small and highly open economy. All Singapore companies have to somehow engage in international business. The course will first explain the global financial markets that facilitate international business and explain the key economic linkages among them. In the context of international finance, understanding foreign exchange rates is crucial. Therefore, this course will also explain exchange rates and those factors that affect the rates. We then examine the challenges for companies created by unexpected changes in exchange rates. We also discuss how, if at all, these firms should manage their exposure to currency fluctuations. Next, we explore the traditional areas of corporate finance including capital budgeting, cost of capital and financial structure from the perspective of multinational companies. The recent financial crisis and other contemporary global financial issues will also be explored.