Should Investors Care about an MNCs Translation Exposure? Point No. The present value of an MNCs cash

Question:

Should Investors Care about an MNC’s Translation Exposure?
Point No. The present value of an MNC’s cash flows is based on the cash flows that the parent receives. Any impact of the exchange rates on the is not important unless cash flows are affected. MNCs should focus their energy on assessing the exposure of their cash flows to movements and should not be concerned with the exposure of their to movements. Value is about cash flows, and investors focus on value.
Counter-Point Investors do not have sufficient financial data to derive cash flows. They commonly use earnings as a base, and if earnings are distorted, their estimates of cash flows will be also. If they underestimate cash flows because of how exchange rates affected the reported earnings, they may underestimate the value of the MNC. Even if the value is corrected in the future once the market realizes how the earnings were distorted, some investors may have sold their stock by the time the correction occurs. Investors should be concerned about an MNC’s translation exposure. They should recognize that the earnings of MNCs with large translation exposure may be more distorted than the earnings of MNCs with low translation exposure.
Who Is Correct? Use the Internet to learn more about this issue. Which argument do you support?

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...