Syllabus bufn 771 international business and

International Business and Task Finance is going to meet Thursdays from January 26 – March almost 8, 2012 via 6: 25-10: 00 evening at the Ronald Reagan Building.

Introduction

The principles of Foreign Finance are identical as the ones from regular home-based finance. Yet , in practice International finance presents unique issues given mix boarder capital flows, personal risk the value of multilateral financial institutions. This program applies standard financial theory and tools to international problems with a specific focus on foreign project finance. This course is intended for students that will be involved any kind of time stage from the investment method from company sponsors (as members with the corporate finance or ideal planning departments) to purchase advisors (investment or industrial bankers and management consultants) to investors (people in charge of debt/equity exploration or cash management).

Educational Aims

The fundamental objective of the course is always to deepen knowing about it of corporate finance while at the same time broadening knowing about it of fund by going into the world of project financial, emerging market segments, and worldwide capital marketplaces.

Essentially, project corporations provide an interesting and very powerful setting in which to study key principles of finance also to test exactly where and under what conditions the principles carry. One of the important concepts in the course is a “imperfections framework”: how do market imperfections including transaction, organization, and financial distress costs affect auto financing and expenditure decisions.

Another and related goal of the course should be to enhance your ability to create benefit through expense and auto financing decisions. Toward that end, the study course will evaluate how to framework, both contractually and organizationally, investments; the right way to value projects in general as well as the equity efforts in particular; the right way to identify and manage project and sovereign risks; as well as how to finance assignments in terms of both the amount of debt and the types of debt. To be able to understand and discuss these kinds of topics requires a solid knowledge of the concepts covered inside the RC program Finance.

Requirements

This course assumes a solid comprehension of investment theory and corporate finance including capital budgeting (Net Present Value), the Capital Asset Pricing Model (CAPM) and Modigliani-Miller theory (MM Propositions I and II with and without taxes). BUFN 770 (International Investment) is not only a pre-requisite, however it is recommended as BUFN 771 is a extension of BUFN 770.

Grading and Projects

The training course is Address and Case powered. A plan of topics has on the following page along with the assigned psychic readings. Students need to solve case studies applying techniques by basic financial, statistics, and also the concepts launched in this training course. Students are encouraged to work in categories of up to several people.

Organizations should turn in written alternatives in the form of a business report to management. Four of the full case write-ups should contain up to five typewritten webpages (double spaced, not including appendices), and one of the write-ups might be in the form of a one page brief summary of the crucial issues in case. There are also brief write-ups for IndSoft plus the IFS Short Case Evaluation. You may select which situations to present extended range form and short form. Write-ups are due at the start of class on the day of discussion (see calendar), even though it would be helpful to me if you can send the write-ups earlier that working day, ideally by 4: 00 pm. Organizations will be asked to present their write-ups in the lecture.

Class involvement is essential towards the case discussion posts, and presence is very important. The ultimate grade will probably be an average of class participation, situations, and the last take home circumstance.

AssignmentPercent of Grade

Cases, Assignment50%

Course Participation25%

Final Collect Case25%

Total100%

Texts

Students will need to have access to cost-free course material by Blackboard (http://www.rhsmith.umd.edu/blackboard) and (copyright) notes and cases in a course supply available at www.XanEdu.com (search under University of Maryland and particularly 3rd there�s r. H. Jones School of Business).

You will find no required text literature for the course. However , there are two suggested books, Multinational Economical Management, any edition, by simply Alan C. Shapiro (published by Wiley), and Intercontinental Financial Administration by Robert J. Hodrick and Geert Bekaert (published by Pearson). These textbooks are intended for background only and cover capital cash strategy, the CAPM, Modigliani-Miller theory.

Academic Sincerity and Perceptive Standards

The Robert L. Smith College of Organization fosters a setting of academic honesty and advancement thoughtful and sound analysis. Faculty and students will hold the other person accountable to meeting intellectual standards including demonstrating quality of thought, articulating assertions based on data, presenting relevant arguments, and interesting in logical reasoning. By simply adhering to these types of standards, college students will develop important critical thinking skills to become demonstrated in both their particular oral and written work.

The University’s Code of educational Integrity is built to ensure that the principles of academic trustworthiness and honesty are upheld. All college students are expected to adhere to this Code. The Jones School does not tolerate academic dishonesty. Almost all acts of educational dishonesty will probably be dealt with relative to the conditions of this code. Please visit the next website for additional information on the University’s Code of educational Integrity: http://www.studenthonorcouncil.umd.edu/code.html

Miscellaneous

When you need extra help you should contact me at work or on my cell phone. But , remember the Learning Assistance Service, 2201 Shoemaker Building, 301-314-7693. Their educational advisors can help with time management, reading, note-taking, and exam preparing skills.

Exceptional Needs: Virtually any student with special requirements should bring this for the attention in the instructor at the earliest opportunity, but not later on than the second week of sophistication.

Class Calendar

January dua puluh enam: Introduction and overview of the course (read the syllabus). Discussion of the structure and format from the class and a review of simple concepts in international financial such as forex markets, capital budgeting and global expense of capital, the use of interest rate and currency trades, and personal risk examination and administration. Please read: Note about Valuing Cash Flows in an International Circumstance (HBS 9-803-028) February 2: Why use Project Finance: Comparison Analysis of Corporate Financing and Job Finance.

Example: BP Amoco (A): Policy statement for the Use of Job Finance

Case Study: BP Amoco (B): Financing Progress the Caspian Oil Areas Please examine: An Overview of Project Financial (HBS 9-202-105) Please assessment: Note about Valuing Funds Flows in an International Framework (HBS 9-803-028)

(Case Write-up 1 Thanks and Indsoft Assignment Due)

February on the lookout for: Guest Lecturer: Robin Glantz – Chief Credit Expert, the Intercontinental Finance Corporation (World Bank Group). Summary of Project Financial, and the Structure of Project Financing. Many short circumstances will be sent out in the course elements prior to school.

Please review: An Overview of Project Fund (HBS 9-202-105)

(IFC Short Circumstance Analysis Due)

February16: Project Management and Large Scale Expense (Term Sheets). Raising Debt and Equity in Foreign Markets

Case Study: Chase’s Strategy for Syndicating the Hk Disneyland Bank loan (A and B)

Please assessment: An Overview of Project Financial (HBS 9-202-105)

(Case Write-up two Due)

March 23: Visitor Speaker: Everett J. Santos

Controlling Risky Assignments and Project Valuation in Emerging Market segments.

In the lecture Discussion of current issues in International Project Finance from a transactional (case) and institutional strategy.

Position of Multilateral Agencies, which include World Lender and the Worldwide Finance Organization (IFC), and international corporate and business bond marketplaces.

Case Study: Petrolera Zuata, Petrozuata C. A., Venenzula

(Case Write-up a few Due) This kind of Class will start at six: 00

Drive 1: Controlling Risky Tasks and Project Valuation in Emerging Markets (continued) Example: Financing the Mozal Project, Mozambique

(Case Write-Up four Due)

Customer Speaker: Philip Tropper, Primary Funds Specialist, International Finance Corp.

03 8: Customer lecturer: Jack Garrity. The situation for International Diversification.

Chinese Abroad Investment and Sovereign Wealth Funds.

Example: Norway Markets Walmart

(Case Write-Up a few Due)

March 15: Last Project – Individual Case Write-up Due

Coursepack: Cases and Remarks

1 . Be aware on Valuing Cash Goes in an Foreign Context (HBS: 9-803-028) 2 . An Overview of Project Financial (HBS: 9-202-105)

3. BP Amoco (A and B) (HBS: 9-201-054 and 9-201-067)

4. Chase’s Strategy for Syndicating the Hong Kong Disneyland Loan” (A and B) – Benjamin C. Esty, Eileen Kane (HBS: 9-201-072) a few. Project Value in Emerging Markets (HBS: 9-702-077)

6. Petrolera Zuata, Petrozuata C. A. – Dernier-n� C. Esty, Matthew Mateo Millett. (HBS: 9-299-012) 7. Financing the Mozal Task – Benjamin C. Esty, Fuaad A. Quershi (HBS: 9-200-005) eight. Norway Sells Walmart – Robert G. Pozen (HBS: 9-308-019)

Foreign Corporate and Project Financing Stephen Wallenstein

Guidelines pertaining to Case Write-Ups

Introduction

I’m sometimes amazed with not enough case write-ups written by pupils, even by experienced pupils in advanced finance courses. Somehow no person has become familiar with appropriate circumstance analysis. And this note will help provide several structure for your write-ups. Notice it is not essential to use my personal structure. However it is important to work with some composition! After all, I must figure out what you are doing and offer you a few feedback and a level. So your write-up should help me follow the trouble, analysis, and solution.

Determining the Problem

A fantastic case statement requires the student to identify and state the standard problem or perhaps situation that it can be analyzing. For instance , a short case should evidently state the basic issues and provide the construction for examining these complications. Long circumstance write-ups need a more detailed respond to specific questions. It is difficult for me to follow the future analysis basically don’t know what problem trainees is trying to solve.

In some instances I may ponder whether the pupil has even taken the time to carefully discover a problem. Failure to identify a issue will result in arbitrary number crunching and sloppy analysis without structure. Asking the right queries is a crucial business and finance skill.

Alternatives and Assumptions

Your case research may then discover alternatives to solving the business enterprise problem. Certainly if the case problem is to calculate net present benefit then you just have one interesting alternative. Nevertheless often you must decide amongst multiple strategies of risk minimization, different funding opportunities, and legal structures.

You must likely make some reasonable presumptions here to narrow the focus and analysis. It is entirely acceptable to simplify your evaluation to focus on the important alternatives and conceptual problems. For example , typically (outside fixed-income) you can use both quarterly or annual cash flows. You could often may well avoid a lot of time by causing the appropriate streamlining assumptions.

Although do not trivialize the case. Instances may possess ambiguous or perhaps conflicting data. Don’t produce drastic presumptions that get rid of the interesting monetary and legal concepts. The task is always to analyze the interesting and relevant financial and legalities without getting mired in extraneous details.

Research

If you have a good question and reasonable alternatives then you can probably use your finance tools and know-how to analyze all of them. This is case-specific, but typically this is the time to use net present value, or covered rate of interest parity, or perhaps an option formula. Some cases are much easier to solve regarding the present benefit of us dollars, while others may be easier to clarify using the foreseeable future value of another forex. Framing the analysis properly can simplify the research and presentation. Please set complex measurements into an appendix and cite the basic assumptions and major figures in the main text. I want to go through your research, I do not need to reconstruct it!

Realization

If you have very good structure your conclusion is going to flow obviously from your evaluation of alternatives. It isn’t hard to write “Do the alternative while using highest net present value. ” Your conclusion can be broader in the event the case is made up of more problems and alternatives. For example , the analysis might hinge seriously on whether a parent organization can actually repatriate foreign income. It might be ridiculous to make a total assumption one of many ways or the different. Instead the final outcome might indicate how delicate the analysis is to this kind of assumption.

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