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Unit I Introduction For International Financial Management Mcom Sem 4 Delhi University Notes

Unit I Introduction For International Financial Management Mcom Sem 4 Delhi University Notes

Unit I Introduction For International Financial Management MCOM Sem 4 Delhi University : Here Cakart.in website team members provide direct download links for Unit I Introduction For International Financial Management MCOM Sem 4 Delhi University Complete notes in pdf format. Download these Unit I Introduction For International Financial Management MCOM Sem 4 Delhi University Complete Notes notes in pdf format and read well.

Unit I Introduction For International Financial Management Mcom Sem 4 Delhi University Notes

Unit I Introduction For International Financial Management MCOM Sem 4 Delhi University : International Financial Management is a well-known term in today’s world and it is also known as international finance. It means financial management in an international business environment. It is different because of the different currency of different countries, dissimilar political situations, imperfect markets, diversified opportunity sets.

International Financial Management came into being when the countries of the world started opening their doors for each other. This phenomenon is well known by the name of “liberalization”. Due to the open environment and freedom to conduct business in any corner of the world, entrepreneurs started looking for opportunities even outside their country boundaries. The spark of liberalization was further aired by swift progression in telecommunications and transportation technologies that too with increased accessibility and daily dropping prices. Apart from everything else, we cannot forget the contribution of financial innovations such as currency derivatives; cross-border stock listings, multi-currency bonds and international mutual funds.

The resultant of liberalization and technology advancement is today’s dynamic international business environment. Financial management for a domestic business and an international business is as dramatically different as the opportunities in the two. The meaning and objective of financial management do not change in international financial management but the dimensions and dynamics change drastically.

Download here Unit I Introduction For International Financial Management MCOM Sem 4 Delhi University Notes in pdf format

DIFFERENCE BETWEEN DOMESTIC AND INTERNATIONAL FINANCIAL MANAGEMENT

Four major facets which differentiate international financial management from domestic financial management are an introduction of foreign currency, political risk and market imperfections and enhanced opportunity set.

FOREIGN EXCHANGE

It’s an additional risk which a finance manager is required to cater to under an International Financial Management setting. Foreign exchange risk refers to the risk of fluctuating prices of currency which has the potential to convert a profitable deal into a loss making one.

POLITICAL RISKS

Political risk may include any change in the economic environment of the country viz. Taxation Rules, Contract Act etc. It is pertaining to the government of a country which can anytime change the rules of the game in an unexpected manner.

MARKET IMPERFECTION

Having done a lot of integration in the world economy, it has got a lot of differences across the countries in terms of transportation cost, different tax rates, etc. Imperfect markets force a finance manager to strive for best opportunities across the countries.

ENHANCED OPPORTUNITY SET

By doing business in other than native countries, a business expands its chances of reaping fruits of different taste. Not only does it enhances the opportunity for the business but also diversifies the overall risk of a business.

Just like domestic financial management, the goal of International Finance is also to maximize the shareholder’s wealth. The goal is not only is limited to the ‘Shareholders’ but extends to all ‘Stakeholders’ viz. employees, suppliers, customers etc. No goal can be achieved without achieving welfare of shareholders. In other words, maximizing shareholder’s wealth would mean maximizing the price of the share. Here again comes a question, whether in which currency should the value of the share be maximized? This is an important decision to be taken by the management of the organization.

International level initiatives like General Agreement on Trade and Tariffs (GATT), The North American Free Trade Agreement (NAFTA), World Trade Organization (WHO) etc has to give promoted international trade and given it a shape. All because of liberalization and those international agreements, we have a buzz word called “MNC” i.e. Multinational Corporations. MNCs enjoy an edge over other normal companies because of its international setting and best opportunities.

International Finance has become an important wing for all big MNCs. Without the expertise in International Financial Management, it can be difficult to sustain in the market because international financial markets have a totally different shape and analytics compared to the domestic financial markets. A sound management of international finances can help an organization achieve same efficiency and effectiveness in all markets.

Unit I Introduction For International Financial Management MCOM Sem 4 Delhi University Notes

Unit I Introduction For International Financial Management MCOM Sem 4 Delhi University : Most finance courses and textbooks implicitly assume that firms operate in only a single country and that differences between countries are irrelevant. However, since the end of World War II, the foreign activities of firms have grown substantially, and this growth, if anything, appears to be accelerating. Firms of all types and sizes now face decisions about how to best obtain and deploy resources abroad. Furthermore, significant differences between countries have persisted, and these give rise to considerable variation in the prevalence of market imperfections.

As a consequence, basic financial decisions now involve cross-border complexities. Choices about raising capital, investment, risk management, acquisition activity, restructuring, and other aspects of financial policy typically involve international considerations. When making these choices, managers must analyze exchange rates, differences in tax rules, country risk factors, and variation in legal regimes. This course provides the foundations for learning how finance works in this rich cross-border setting.

Career Focus

IFM is intended for students who will be involved in cross-border investment and financing decisions as multinational firm managers, transaction advisors (investment bankers, commercial bankers, or consultants), or investors (research analysts or money managers). Students seeking to reinforce the foundations of finance with particular attention to issues related to international finance and economics are also encouraged to enroll.

Educational Objectives

The goal of the course is to provide students with a deep understanding of financial management issues in a global setting. The course aims to help students develop analytical tools that incorporate key international considerations into fundamental financial decisions. The cases provide opportunities to build the skills needed to create and capture value across borders.

Course Content and Organization

IFM has four distinct modules:

  • Currencies and Asset Prices:
    This module provides basic theories and fundamental tools that will be used in the rest of the course. What are the basic mechanics of exchange rates? What determines asset prices in global markets, and how do currencies influence stock prices?
  • Multinational Financial Decision Making:
    This module considers several of the central financial decisions multinational firms must make concerning capital structure, risk management, and tax optimization. How should firms capitalize subsidiaries around the world? When should firms partner with local firms? How are firms exposed to exchange rates, and how should firms hedge those exposures? How do tax considerations factor into internal financial decision-making?
  • Cross-border Valuation and Financing:
    This module covers how valuation techniques and financing decisions must be modified in a cross-border setting. How should firms think about the cost of capital around the world? How should investments in emerging markets be evaluated? How can firms capitalize on market imperfections in their financing and investment decisions?
  • Institutions and Finance:
    This module considers how differing institutional arrangements, both formal and informal, impact financial decision-making. Professor Foley will focus on how differences in legal regimes, especially differences in the legal protection of creditors and shareholders, affect investment and restructuring decisions. Professor Jin will focus on investing in emerging markets using cases on M&A and PE transactions in China, with an emphasis on the importance of informal institutional arrangements and relationship building.

Unit I Introduction For International Financial Management MCOM Sem 4 Delhi University Notes

Unit I Introduction For International Financial Management MCOM Sem 4 Delhi University : This is a awesome ebook on International financial market management for all the student pursuing management courses or MBA. This ebook is in PDF format for you all to download. You can also find lecture notes and handouts in this section which will really help you during your exams. You can also download another ebook on International financial management www.cakart.in
However, the topics covered in this ebook are as follows:

International financial management

Balance of Payment

Introduction, Basics of Accounting Conventions, Objectives, Process and Importance of accounting conventions, Components of Balance of Payments, Factors affecting the components, Indian Scenario.

Balance of Payment: Foreign Scenario

Foreign Exchange Markets, Export and Import of Goods and Services, Trade Balance, Merchandise Trade Balance.

A Frame work for Global Finance-I

Financial markets, Measures and Significance of Global Financial Markets, Domestic and Offshore markets and their significance

A Frame work for Global Finance-II

Measures and Significance of Euro Markets, Interest rates in the Global Money Markets, Overview of Money Market Instruments.

International Equity Investment

Introduction, Risk and Return from Foreign Equity Investment, Equity Financing in International Markets and its Mechanism

Unit I Introduction For International Financial Management MCOM Sem 4 Delhi University Notes

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