LCBB6002 International Financial Management-international cost of capital

Upon the successful completion of this module, the student should be able to:

• Apply and critically evaluate the relevant theoretical framework and models of international financial management;

• Evaluate, apply and critically discuss various methods and techniques relating to the financing of an international business;

• Apply and critically appraise various theoretical models of corporate value, international cost of capital, and financial structure. 

Task Description

Your group has been approached by the Chairman of British Petroleum Corporation (BP) to present to their Board of Directors a report that critically analyses and evaluates the corporation’s International Financial Management strategies. Based on your knowledge of International Financial Management (IFM) theories, select any five of the topics listed below and present a report that:

1.Critically analyses reasons why BP corporation internationalised;

2.Critically analyses how country risks may affect BP’s investments opportunities in host countries;

3. Critically analyses reasons why BP may source for debt internationally, and, more specifically, explain whether it would be more economically beneficial for the BP’s management to consider taking advantage of interest rate parity in different countries;

4. Critically analyses and evaluates BP Corporation’s sources of finance;

5. Critically analyses and evaluates BP Corporation’s capital structure

6. Critically analyses and evaluates the strategies that BP corporation has adopted inmanaging their financial risks;

7. Critically analyses and evaluates the effectiveness of issuing stocks internationally by BP Corporation in financing projects;

8. Evaluates the different strategies that BP Corporation uses to manage their exposure to foreign exchange risks;

9. Critically analyses and evaluates how BP Corporation manages and controls their working capital.