FINANCIAL POLICIES & INVESTMENT STRATEGIES - 2

The objective of this course is to provide the students with an introduction to the research frontier in financial policies and investment strategies with a focus on internationalization and its implication for corporate practices. The course takes a cross-disciplinary approach; capitalizing on research from economics, finance, management, strategy, and accounting.

Attending and actively participating to classes, studying the textbook and the other suggested materials, including the real cases used during the course, will allow students to:
1. Knowledge and comprehension
• acquire advanced knowledge of fundamental models of corporate finance and know how to apply them in practice, to comprehend how in reality the investment, financing and dividend decisions work.

2. Ability to apply knowledge and comprehension
• master the techniques to determine the cost of capital of firm in oder to discount the expected cash flows according to risk they embed
• identify the company optimal financial structure
• comprehend the consequences of the choices of dividend policies
• apply methods and tools acquired during the course to interpret the dynamics of corporate finance

3. Judgment ability
• evaluate the sustainability of the firm financial structure and its equilibrium
• evaluate the effects of different dividend policies that the firm may choose

The main prerequisite is knowledge of financial and management accounting.

Nov 4, 15.45 – 18.15, Aula 2B: Market segmentation and financial integration
Student preparation: MBF 1-3; FMT 1-2; MUST 1-2.


Nov 5, 15.45 – 18.15, Aula 2B: Financial integration: concepts and measures
Student preparation: MBF 5-6, 9; FMT 3-9, 13-15
Oxelheim (2001), “Routes to Equity Market Integration – The Interplay between Politicians, Investors and Managers”. Journal of Multinational Financial Management, Vol. 11, No. 2, 183–211.


Nov 13, 15.45 – 18.15, Aula 8A: Internationalizing the capital structure.
Student preparation: MBF 13-14 (sections on financing solutions and capital structure); MBF 16, FMT 10-12.


Nov 15, 15.45 – 18.15, Aula 10B: Internationalizing the cost of capital
Student preparation: MBF 13-14 (sections of the cost of capital and cross-listings); MBF 18 (sections on multinational capital budgeting).
Hand-out of group assignment


Nov 18, 15.45 – 18.15, Aula 2B: International macro influences on the firm – threats or opportunities
Student preparation: MUST 3-5
Oxelheim, L. (2019). "Optimal vs Satisfactory Transparency: The Impact of Global Macroeconomic Fluctuations on Corporate Competitiveness", International Business Review, Vol. 28, pp. 190-206. (open access)


Nov 19, 15.45 – 18.15, Aula 2B: Corporate strategies for dealing with macro financial influences
Student preparation: MUST 8-12


Dec 2, 15.45 – 18.15, Aula 2B: Should firms manage risk?
Student preparation:
Bartram, S M (2000), “Corporate Risk Management as a Lever for Shareholder Value Creation”, Financial Markets, Institutions & Instruments, 9(5), 279-324.
Froot, K A, D S Scharfstein, and J C Stein (1994), “A Framework for Risk Management”, Harvard Business Review, Nov, 91-102.
Stulz, R (2013), “How Companies Can Use Hedging to Create Shareholder Value”, Journal of Applied Corporate Finance, 25(4), 21-29.


Dec 3, 15.45 – 18.15, Aula 2B: Measuring macroeconomic risk exposure
Student preparation: MBF 7, 10-12; MUST 6


Dec 9, 15.45 – 18.15: Hedging macroeoconomic risk exposure
Student preparation: MBF 7, 10-12; MUST 6-7


Dec 10, 15.45 – 18.15, Aula 2B: Presentations and discussions of group assignments (mandatory participation))

Eiteman, Stonehill and Moffett, Multinational Business Finance, Pearson, 14th edition. Global Edition. (MBF)

Oxelheim and Wihlborg, Corporate Decision-making with Macroeconomic Uncertainty, New York: Oxford University Press. (MUST)

Oxelheim, Financial Markets in Transition, London: Routledge (download for free: https://www.ifn.se/eng/publications/books-in-english/1970–1999/1996-financial-markets-in-transition ). (FMT)
Journal articles: see below.

Semester requirements:
 During the course students will have to hand–in and present a group (3-4 students) assignment on the role of the macro financial environment of a firm on its performance and value. The result will be graded.
 Students need to carefully prepare before each class in accordance with the lecture schedule and be prepared to discuss in class the topic of the day.


Final exam:
A closed-book exam which accounts for 25% of the final grade of the full course. The assignment mentioned above will count for 25% of that final grade.

group assignment (3-4 students)

English

written