The course examines important issues in international corporate finance using a mixture of classes involving lecture/discussion and the analysis of cases. After a review of international finance fundamentals, we will examine international capital budgeting decisions, which require an understanding of exchange rates and the determination of anappropriate cost of capital. We will use both discounted cash flow analysis, adjusted net present value analysis, and various multiples in our valuations. These issues are examined as they arise in the valuation of direct foreign investments, leveraged buyouts, initial public offerings, and international mergers and acquisitions. Several of the cases involve corporations in emerging markets where issues of political risk arise. The course also analyzes the determination and management of foreign exchange risks of various types. The cases include discussions of the use of foreign currency forwards, options, and swaps and their appropriate use in risk management to enhance the value of a firm.

Robert Hodrick

Nomura Professor Emeritus of International Finance

Professor Hodrick teaches both fundamental and advanced courses in international finance. His expertise is in the valuation of financial assets. His current research explores the empirical implications of theoretical pricing models that generate time-varying risk premiums in the markets for bonds, equities and foreign currencies. He is also a research associate of the National Bureau of Economic Research.

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