Why is this strategy risky

Assignment Help Operation Management

Reference no: EM13965865

A Mexican firm decides to issue Yankee bonds in the U.S. The bonds are denominated in U.S. dollars, but the Mexican firm will need to convert Mexican Pesos into Dollars at each coupon date in order to pay the required interest on the bonds. The bonds have a lower interest rate (in MP-terms) than would be the case if they were issued in the firm’s home market of Mexico. Why is this strategy risky (explain)?

Reference no: EM13965865

Questions Cloud

Customers arrive at hair salon according to poisson process : Customers arrive at a hair salon according to a Poisson process with an average of 16 customers per hour. Which of the following is most likely true, based on this information:

Specification and cost analysis of a personal computer : This is all made up but write a paper that describes and gives specification of a dream personal computer. I am a web developer so I don't need the bells and whistles. However assume you have been given a limitless budget to purchase a new compute..

Reflect on implications for your personal leadership styles : The name, industry, and description of the organization, including the culture of the organization.

Used non-regularly spaced appointment intervals : From personal observations or experience, provide an example where you have seen where service operations have used non-regularly spaced appointment intervals. Did you feel it worked reasonably well? Please explain.

Why is this strategy risky : A Mexican firm decides to issue Yankee bonds in the U.S. The bonds are denominated in U.S. dollars, but the Mexican firm will need to convert Mexican Pesos into Dollars at each coupon date in order to pay the required interest on the bonds. The bonds..

Disadvantages of internal venturing in relation : By some accounts, only about 50 percent of corporate ventures reach profitability after six years. Is corporate venturing worth it? Discuss the advantages and disadvantages of internal venturing in relation to the extent of its financial success.

How the united states ranks on this issue : How the United States ranks on this issue in relation to other countries. Efforts of the World Health Organization and other agencies on this issue

What are the characteristics of a disruptive innovation : What are the characteristics of a disruptive innovation? In what way is a disruptive innovation similar to and different than a radical innovation? What are the strategic implications of those differences and similarities?

Discounted cash flow calculation-what is net present value : A 3 year financial project is forecast to have net cash inflows of $20,000, $25,000, and $30,000 in the next three years. It will cost $50,000 to implement the project payable at the beginning of the project. If the required rate of return is 0.25 an..

User Account

All Pages