Risk with respect to payment in international currencies

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Reference no: EM131715112

Part A - Suppose you are a Chief Financial Officer (CFO) of a UK based listed company. The company is currently trading at £10 per share and 100 million shares in issue. The total market value of the issued share capital of the company is £1,000 million. You have been requested to write a report to the board of directors with respect to raising an additional funding of £500 million to enable the next stage of development of international projects to be carried out.

Note:
For the report in Part A, it should critically review the advantages and disadvantages of the main funding options with many appropriate academic references. Further, your report should form the basis for a discussion at the next board meeting. Especially, it would be expected that this report would include the different options available through the equity and debt markets.

Part B - This additional funding will allow the business to become more global with the opportunity to develop a market in numerous countries with payment being made in the local currency. The directors are conservative in their attitude to risk. You have been requested to provide a report to the directors critically evaluating alternative derivatives including forwards, futures, options and swaps that are available in the market in order to minimise the risk with respect to payment in international currencies.

Note:
For the report in Part B, it should critically discuss and compare the use of derivatives including forwards, futures, options and swaps to hedge Foreign Exchange (FX) Risk. By using many appropriate academic references, discussions may include:
 - how it works in mitigating FX risk.
 - advantages and disadvantages of each type of derivative in managing FX risk.

Verified Expert

This is a 4000 word essay. The first part of the essay explains the various routes through which a company can raise GBP 500 million. This money is to be used for international expansion of the company. The part explains the advantages and disadvantages of the various funding options. The second part of the essay explains the various ways in which the company can hedge its foreign currency risk once it enters international markets. Futures, forward, options and swaps have been explained. How they can be used for hedging the currency risk of the company.

Reference no: EM131715112

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Reviews

inf1715112

4/1/2018 6:10:30 AM

Thank you very much for the comprehensive report. I think it had covered a lot. I kindly request the following. 1) please try to reduce the size of the examples and increase the content for advantages and disadvantages for funding options with adequate reference. There are long paragraphs without any reference which can be a concern. 2) References are not adequate. Please include more references. 3) Both parts should be equally weighted (Part A and Part B) Further, I kindly request you to send me the soft copies that you have referenced. I try to check the citations through Google Scholar and Cite this for me websites. But most of your references are not available on those websites. please send me the links to your references. Thank you very much for the amended solution. again thank you very much for the excellent service and hope that you will help me in my future assignments as well.

len1715112

11/10/2017 1:06:06 AM

P2-P1 At most one element has not been addressed; little reference used; some relevant information used; argument is not well supported by relevant evidence; F1 Little reference used; no information used; argument are not supported by relevant evidence; =F2 No reference used; no information used; argument is not supported by relevant evidence;

len1715112

11/10/2017 1:06:00 AM

Marking Criteria* =D2 All the required elements have been well addressed; appropriate and clear use of references; well supported argument with evidence; appropriate use of all the relevant information; Good presentation of arguments; Substantial evidence of extensive readings; D1-P5 All the required elements have been fully addressed; clear use of references; argument are supported by evidence; appropriate use of all the relevant information; Good presentation of arguments; P4-P3 All the required elements have been addressed; some reference used; argument are supported by some relevant evidence; there is relevant information but not fully discussed;

len1715112

11/10/2017 1:05:52 AM

? The assignment is worth 90% of your overall mark. It is expected that the assignment will apply the concepts and approaches developed in the text and credit will be given for evidence of wider reading. ? You are expected to link the reports for Parts A and B together in the form of a single essay. ? The essay must be around 4,000 words (a minimum word count of 3,800 and a maximum word count of 4,200) excluding the references, tables, figures and notes. You must provide word count. Parts A and B are expected to be equally weighted, i.e., around 2,000 words for each part. ? You should also refer to further references from a variety of sources (e.g., journals, books, working paper etc.) in relation to this topic. ? All references must be correctly cited following the APA 6th referencing system.

len1715112

11/10/2017 1:05:40 AM

this assignment is under global finance subject. I need a complete answer. Assignment is at MBA level at 23:59 (UK time) (Please Note: this assignment is worth 90% of your total final mark.) There are two parts in this written assignment, Part A worth 45% and Part B worth 45%. Note 1: The assessment for this module involves two components: a written assignment and the end of unit tests. The written assignment is worth 90% of the overall grade and the end of unit tests is another 10%. The overall grade for this module is calculated from the sum of weighted component grades.

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