BUSN9241 International Business Finance

2012

4.5

6 x 1-day seminars per semester

BUSN9216 has been successfully completed

Master of Accounting; Master of Accounting (Advanced); Master of Business Administration; Master of Business Administration (Advanced); Graduate Diploma in Research (Business); Graduate Certificate in Research (Business)

The topic introduces students to international business transactions and their impact on financial decision-making within an organisation having an international perspective. The topic will include study of the international monetary system and foreign exchange rate determination, foreign exchange risk analysis and management, international investment decisions and the financing of international business operations.

The focus of this topic is the financial management environment and issues faced by international business enterprises because of their international operations. Many financial management issues are common to domestic and international businesses. Businesses with international operations have available to them economic advantages and opportunities that are not available to enterprises which only operate in domestic economies. International businesses also face additional risks because of the cross-border nature of their business. Taking advantage of these opportunities and managing these additional risks is a recurring theme through the topic. Emphasis will be given to managing the multinational corporation, but many of the issues discussed in the topic are also relevant for firms with more restricted international business dealings.

Specific learning outcomes for the topic include being able to:

• discuss the nature, characteristics and economic importance of multinational corporations
• explain how exchange rates are determined and the different exchange rate systems faced by international business dealings
• distinguish different types of international transactions, such as trade and capital flows, and their economic consequences
• discuss the factors affecting foreign exchange rates
• discuss ways for managing foreign exchange risk
• calculate the cost of capital for foreign investments
• explain capital budgeting in a multinational corporation

Throughout the topic, the underlying theme is the management decision-making issues arising from the international nature and activities of these organisations. Decisions made by financial managers must be consistent with the overall objectives of the shareholders of these corporations. The primary objective of these shareholders is that their wealth is maximised, and so this is the primary purpose in the financial management of these corporations.