Questions from Financial Management

Q: Olmsted Co. has small computer chips assembled in Poland and transports

Olmsted Co. has small computer chips assembled in Poland and transports the final assembled products to the parent company; the parent then sells these products in the United States. The assembled pro...

Q: Minneapolis Co. is a major exporter of products to Canada.

Minneapolis Co. is a major exporter of products to Canada. Today, an event occurred that has increased the uncertainty surrounding the Canadian dollar’s future value over the long term. Explain how th...

Q: Arlington Co. expects to receive 10 million euros in each of

Arlington Co. expects to receive 10 million euros in each of the next 10 years. It will need to obtain 2 million Mexican pesos in each of the next 10 years. The euro exchange rate is presently valued...

Q: If a U.S. recession occurred without any change in

If a U.S. recession occurred without any change in interest rates, identify the part of the MNC valuation equation that would most likely be affected.

Q: Because of the low labor costs in Thailand, Melnick Co.

Because of the low labor costs in Thailand, Melnick Co. (based in the United States) recently established a major research and development subsidiary there that it owns. The subsidiary was created to...

Q: MNCs tend to expand more when they can more easily access funds

MNCs tend to expand more when they can more easily access funds by issuing stock. In some countries, shareholder rights are very limited, and the MNCs have limited ability to raise funds by issuing st...

Q: During the Asian crisis, why did the discount of the forward

During the Asian crisis, why did the discount of the forward rate of Asian currencies change? Do you think it increased or decreased? Why?

Q: Today, the stock price of Genevo Co. (based in

Today, the stock price of Genevo Co. (based in Switzerland) is priced at SF80 per share. The spot rate of the Swiss franc (SF) is $0.70. During the next year, you expect that the stock price of Genevo...

Q: Tuscaloosa Co. is a U.S. firm that assembles

Tuscaloosa Co. is a U.S. firm that assembles phones in Argentina and transports the final assembled products to the parent, which then sells the products in the United States. The assembled products a...

Q: Asheville Co. has a subsidiary in Mexico that develops software for

Asheville Co. has a subsidiary in Mexico that develops software for its parent. It rents a large facility in Mexico and hires many people in Mexico to work in this facility. Asheville Co. has no other...