Problem 10.03 – Siam Cement
Multinational Business Finance
Eiteman, Stonehill, and Moffett
15th Edition
Determine the amount of the foreign exchange loss on Siam’s debt during the Asian crisis in 1997.
Determine the amount of the foreign exchange loss on Siam’s debt during the Asian crisis in 1997.
How can Embraer manage its currency exposure given a contract to produce and deliver four aircraft to a U.S. airline for $ million, while also needing to pay foreign suppliers $ million for inputs one year from now?
Compare Procter and Gamble’s position without a hedge, with a forward market hedge, a money market hedge, and a currency agent hedge.
Determine Elan’s position without a hedge, and with a forward market hedge and then comment on whether or not a statement is true or false.
Najafi purchased a Korean firm and has Korean won due in six months. Determine the amount that Najafi would pay without a hedge, with a forward hedge, with a money market hedge, and finally, the amount Najafi will pay with an option hedge. Make a recommendation as to which hedge should be used if the Won is expected to be weaker and stronger relative to the dollar.
How did Siam Cement’s aggressive growth strategy and the devaluation of the Thai baht lead to enormous losses during the Asian crisis in 1997?
What are the costs and benefits of the forward hedge, money market hedge, and option hedge? What is the break-even reinvestment rate when looking at the forward vs the money market hedges?
Determine how much Mattel will receive for a large shipment of toys using the forward rates from Credit Suisse and Barclays. Then conduct a money market hedge using interest rate data. Finally, advise Mattel on the best hedging alternative for the company. Experts Have Solved This Problem Please login or register to access this content.
Analyze the unhedged position, forward hedge, money market hedge and option hedge for Micca​ Metals, Inc. is a specialty material and metals company.
Using the current rate method and a giant grid of numbers, determine the translation gain or loss and then comment on where the gain or loss should appear in the financial statements.