The economic affairs of all nations are connected one to another. This connection was amply demonstrated during the recent economic crisis. The discipline of international finance explores the workings of the financial world in this interconnected global setting. As such, International Corporate Finance covers a wide range of topics. This text focuses on a key player in this financial world: multinational corporations (MNC). By applying general financial concepts and procedures, the text explains the conduct of financial management in MNCs. Because most corporations are either directly or indirectly affected by multinational entities and have a global exposure, a study of MNC financial management has broad applicability.

Intended Audience

International Corporate Finance is a compact, corporate-focused text designed for use in an international corporate course at both the undergraduate and graduate levels.

International Corporate Finance offers in-depth coverage of critical international corporate finance topics including risk management, capital budgeting, financing, working capital management, and acquisitions and alliances. Strong coverage of these and other key topics provide direct value to students embarking on corporate careers.

This text has 15 chapters, and most courses will be able to cover the majority of them if desired. The text offers flexibility to those instructors who may wish to supplement the text with additional readings and cases.

Key Features

• Hands-on Approach. Most chapters have numerical examples and a rich and varied selection of end-of-chapter problems. This helps instructors to convey key points in a logical manner.
• Excel Spreadsheets. Most quantitative examples are formulated using spreadsheet logic. The solutions to end-of-chapter problems are also formulated in Excel, offering students numerous templates for exploration and learning. Students who use this text and who use the solutions files will enhance their spreadsheet skills. Because many careers in finance require a high level of spreadsheet proficiency, students obtain tangible benefits.
• Current Examples. The text is interspersed with numerous real-world examples: This is particularly useful for bringing the topics to life for students without field experience. These examples concern firms in diverse industries and diverse countries and serve to increase students’ awareness of global issues. This book has many examples from emerging markets: U.S. as well as non-U.S. students can relate to these examples.
• Credit Crisis of 2007–2008. The credit crisis of 2007–2008 is one of the most significant events in recent times, and many examples allude to this event. Without a doubt, this crisis has impacted financial practice (e.g., a heightened sensitivity to counterparty risk), so it is important to convey this cutting-edge material. More generally, students learn to appreciate the dynamic nature of the financial world.
• Mini-cases. Each chapter has a mini-case (using the same firm) that offers an opportunity for students to apply concepts covered throughout the chapter. Many of these cases contain information about real-world firms to illustrate to students how the concepts in the text relate to the everyday world. Each mini-case is designed to be completed with 1–3 hours of work and can be used for a 20–30 minute class discussion.

Content and Organization

Chapters 1–5 describe the international environment and discuss currency-related issues (markets, valuation, derivatives, forecasting). A noteworthy feature is strong coverage of currency derivatives, including Eurocurrency derivatives in Chapter 3. This set of chapters provides a compact foundation so that core corporate material can quickly follow.

Chapters 6–9 form the core corporate risk management and capital budgeting material, which build on the foundation of Chapters 1–5. Noteworthy is a two-chapter sequence on capital budgeting. These chapters cover a wide range of material, including the use of the real options methods to value projects. Because the financial analysis of projects is a key function in MNCs, this depth in capital budgeting adds significant value for the student.

Chapters 10–11 discuss financing strategies (long term and short term) as well as their connection to overall firm strategy. Long-term financing is linked to strategic considerations, and short-term financing is linked to operational working capital considerations. An efficient treatment of relevant theories (e.g., international CAPM) allows space for a robust discussion of practical financing issues (e.g., how currency risk and agency costs affect financing choices).

Chapter 12 is unique, focusing on methods by which firms penetrate markets ( M&A, joint ventures, etc.). This chapter also demonstrates M&A and joint venture valuation. Because these two methods in particular form the bulk of foreign direct investment by MNCs, this material is of great use to students in their careers.

Chapters 13–15 cover several important topics. They discuss trade methods, trade finance, taxation, currency/hedge accounting, and international diversification/investing.

Wherever possible, chapters have been constructed as independent units: This allows instructors to change the order of the chapters and thus construct a "custom" textbook for their course. For example, one can switch the order of Chapters 3 (Currency and Eurocurrency Derivatives) and 4 (Currency Systems and Valuation); instructors may also cover capital budgeting (Chapters 8 and 9) before currency exposure (Chapters 6 and 7).

Supplements

To assist with course preparation, the following ancillaries are available on the Online Learning Center at www.mhhe.com/robin1e:

• Sample Syllabi. Although most instructors will construct their own, sample syllabi are available to reduce start-up time for some instructors.
• PowerPoint Presentation. Prepared by the author, PowerPoint slides are provided for each chapter. These files include images and tables from the text and are easily customizable to suit various teaching styles.
• Solutions Manual. Prepared by the author, the manual includes solutions to end-of-chapter problems provided in Excel format. These files are painstakingly constructed to not only use Excel formulas for calculations but also display the algebraic formulas behind the calculations. These files are user friendly and customizable. Importantly, students can use many of the solutions as templates for exploration of concepts. The solutions to the mini-cases are also provided in the Excel format.
• Excel Chapter Examples. Significant numerical examples are provided in Excel spreadsheets. This will aid students' comprehension of key topics as they work through the chapters.
• Test Bank. Prepared by Robert Allen, Columbia South University, multiple-choice questions and a problems section offer a variety of questions to meet any instructor's quizzing and testing needs.