EBK FUNDAMENTALS OF CORPORATE FINANCE
9th Edition
ISBN: 9781260049237
Author: BREALEY
Publisher: MCGRAW HILL BOOK COMPANY
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Chapter 22, Problem 2MC
Summary Introduction
Case summary:
Person GL has received his third memo on December 31st 2016. Person JE the CEO of company D have stated in his memo that the purchase of the forward yen rate was an idea of person GL and the rate is higher and it tends to be a very affluent insurance. Peron GL also makes a recommendation that the yen could be purchased in the spot rate as they are lesser than the forward rate.
Person JE is also worried about the cheap financing where the company is paying 6% to make the borrowings of dollars in a year. Person BH was stating that a year yen loan might be bought for 2% that was shocking
To discuss: Whether the it would be better for the company if they buy the yen and then put them on a deposit.
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Chapter 22 Solutions
EBK FUNDAMENTALS OF CORPORATE FINANCE
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