The Theory and Practice of International Financial Management

by Click, Reid W.; Coval, Joshua D.

• ISBN13: 9780130204578
• ISBN10: 0130204579
• Format: Paperback
• Copyright: 2002-01-01
• Publisher: Pearson College Div

Summary

For MBA courses in International Corporate Finance, International Business Finance, and Multinational Financial Management. This book focuses upon the basic principles which together make a toolkit for analysis of issues in international finance. It also captures the importance and excitement of international financial management and highlights the new approaches in the field. It covers the theoretical foundations of international financial decisions and contains extensive applications of the theory to financial practice with a main objective of developing critical thinking skills regarding the theory and practice of international financial management.

Table of Contents

Part I International Macroeconomic Concepts	1	(100)
International Capital Flows	3	(52)
International Parity Propositions	55	(46)
Part II Going Global: Undertaking Foreign Investment Projects	101	(104)
International Capital Budgeting	105	(26)
Financing International Projects	131	(37)
Foreign Investment Strategy	168	(37)
Part III Managing Foreign Exchange Risk	205	(146)
Translation and Transaction Exposure	209	(25)
Economic Exposure	234	(24)
The Risk of Foreign Exchange Exposure	258	(23)
Hedging with Financial Instruments	281	(40)
Risk Management Strategy	321	(30)
Part IV Managing International Taxation and Political Risk	351
International Taxation	353
Political Risk	401

Excerpts

The field of international financial management addresses financial decisions facing corporate managers regarding trade and investment across national borders. As firms become increasingly involved in the global economy, issues in international financial management become more important. Simultaneously, events taking place on the international financial stage--from trade disputes to currency crises--make the issues more intriguing. As a result of the additional attention to international financial management, new approaches to the issues have been developed over the past decade. These new approaches are characterized by high analytical rigor, substantial attention to empirical evidence, and integration of functional areas (including finance, economics, strategy, and accounting/taxation). Most importantly, however, the new approaches are designed to establish decision processes that can be applied in various situations and under changing circumstances. This book captures the newfound importance and excitement of international financial management, and highlights the new approaches in the field. It is the result of designing our own courses in international financial management to be rigorous and timeless, as well as practical, interesting, and relevant for the students. The book covers the theoretical foundations of international financial decisions, but also contains extensive applications of the theory to financial practice. This combination has been quite rewarding for us and for our classes, and we are sure that you will find the structure rewarding as well--whether you are the instructor or the student. We are grateful to three editors who helped us develop this book. At Prentice Hall, Paul Donnelly was the Finance Editor who did all the work to get us a publishing contract, and Maureen Riopelle was the Finance Editor who did all the work to get the book finished. Libby Rubenstein, the Developmental Editor, read every sentence of the manuscript and provided extensive corrections and suggestions for improvement. Those who have also reviewed this text include Jorge L. Urrutia, Loyola University Chicago; Youngho Lee, School of Business, Howard University; Joseph E. Finnerty, University of Illinois; Mark Eaker, University of Virginia; Geert Bakaert, Columbia University; Amar Gande, Vanderbilt University, Owen Graduate School of Management; Christopher T. Stivers, University of Georgia, Terry College of Business; Andrea L. DeMaskey, Villanova University; Stanley Heyn, St. Mary's College; Balasundram Maniam, Sam Houston State University; Michael W Carter, University of Arkansas-Fayetteville; and Owen Gregory, University of Illinois at Chicago. THE ESSENCE OF THIS BOOK The Theory and Practice of International Financial Managementprovides a streamlined, consistent framework of principles that form the basis of decisions in this field. Although there are already many books on international financial management, we were motivated to write this one because we found that nearly all of the existing books fail to provide adequate analytical foundations. In contrast, this book is more rigorous than most other books because it presumes a familiarity with many ideas that form the basis of modern business curriculums. In recognition of the fact that the world is changing faster than textbooks can convey, this book also contains less institutional detail than most textbooks, as many specific facts are likely to be outdated by the time you read this preface. In addition to presenting the theory of international financial management, however, and despite the lack of ever-changing institutional detail, this book contains a significant focus on applications of the theory to managerial decisions. Students are typically more motivated to study theory when they see its practical applications, so we present the practice of international financial management alongside the theory.