The course examines several 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, considerable time is devoted to international capital budgeting decisions, which require an understanding of exchange rates and the determination of an appropriate cost of capital. We examine these issues as they arise in the valuation of direct foreign investments, in international joint ventures and in international mergers and acquisitions. A second issue is 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. A third issue involves the use of innovative, international financing vehicles for the multinational corporation. A fourth issue is valuation of corporations in emerging markets, and a fifth issue is the use of project finance.
Nomura Professor 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.