Establishing portals in numerous countries

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Facebook has expanded its business by establishing portals in numerous countries, it also generates cash inflows from selling advertising space on its website. Each portal results in cash flows in a different currency. Thus, the valuation of Facebook is based on its expected future net cash flows in Egyptian pound after converting them into U.S. dollars, its expected net cash flows in British pound after converting them into U.S. dollars, and so on. Explain how and why the valuation of Facebook would change if most investors suddenly expected that that the dollar would weaken against most currencies over time.

Reference no: EM133120106

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