Course

Unit 1

Financial Management Function

Organizational Goals – Management of Financial Resources – Assessment of Organizational Performance and Financial Risk – Framework for Risk Management – Capital Investment Monitoring – Advising Board of Directors – Best Practice in Financial Management – Inter- connectedness of Functional Areas – Resolution of Stakeholder Conflicts – Ethical Framework – Ethical Financial Policy for Financial Management – Sustainability and Environment Issues – Integrated Reporting and Governance.

Unit 2

Financial Management Environment

Theory and Practice of Free Trade – Role of International Financial Institutions and Markets and their Impact – New Developments in Macroeconomic Environment – Financial Planning Framework for a Multinational Organization – Dividend Policies – Transfer Pricing of Goods and Services across International Borders

Unit 3

Cost of capital

Approaches to capital structure – capital structure theories and their impact on cost of capital & company valuation – use of MM prepositions in financial management.

Unit 4

International corporate finance

Sources of international finance – Euro bonds, Euro Dollar & Foreign currency bond markets

– concept of Islamic financing & products thereof such as Murabaha, Mudaraba, Musharaka, Ijara and Sukuk bonds – role of IMF and WTO

Unit 5

(Advanced investment appraisal techniques including international investment appraisal)

Merits & demerits of traditional techniques like NPV and IRR – use of modified IRR – concept of duration and modified duration – adjusted present value method (APV) (impact of financing on project NPV) – use of options theory in evaluating investment projects having embedded real option (using Black-Scholes model) – Assessing Value at risk (VaR model) – multi-period capital rationing (linear programming (only setting up LP problem & interpreting the output) – estimating project specific cost of capital using MM model and process Beta and CAPM Financial evaluation of international projects – estimating exchange rates using purchasing power parity (PPP) and interest rate parity (IRP) equations – applying Fischer equation – estimating cash flows and estimating relevant cost of capital – effect of double taxation avoidance agreements – exchange controls & withholding taxes

Course outcome:

CO1: Explain and evaluate the role and responsibility of the senior financial executive or advisor in meeting conflicting needs of stakeholders and recognise the role of international financial institutions in the financial management of multinationals.

CO2: Understand and apply the investment decision tools for domestic and international operations.

CO3: Understand and apply various capital structure theories in complex business cases.

CO4: Understand and apply black scholes model for option pricing.

CO5: Understand and evaluate the beta gearing and regearing in finding cost of capital.

Learning outcomes:

LO1: Understand the role of a senior financial advisor in global environment along with finance function in a multi-national organisation.

LO2: Understand the different sources of finance & estimate the cost of capital.

LO3: Using advanced investment appraisal techniques including international investments. LO4: Calculate the cost of capital for a new venture with different risks.

LO5: Calculate the best dividend policy for a company with various international operations with country specific tax legislations.

Reference Textbooks:

• ACCA Kaplan AFM Study text and Revision kit 2021-22
• Fundamentals of Financial Management by Eugene Brigham Joel F. Houston
• Corporate Finance Theory and Practice by Maurizio Dallocchio, Yann Le Fur, Pascal Quiry, Antonio Salvi, Pierre Vernimmen
• Multinational Business Finance by Eiteman, David Stonehill, Arthur I. Moffett, Michael H.