Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

0 Vaniteux's Returns (C). Spencer Grant is a New York-based investor. He has been closely following his investment in 300 shares of Vanitoux, a French

image text in transcribed
0 Vaniteux's Returns (C). Spencer Grant is a New York-based investor. He has been closely following his investment in 300 shares of Vanitoux, a French firm that went public in February 2010. When he purchased his 300 shares at 17.76 per share, the euro was trading at $1.35837. Currently, the share is trading at 27.43 per share, and the dollar has fallen to $1.3987/8 Spencer considers selling his shares at this time but chooses not to sell them after all. He waits, expecting the share price to rise further after the announcement of quarterly earnings. His expectations are correct, and the share price rises to 30.61 per share after the announcement. The current spot exchange rate is $1.3248/ a. If Spencer sells his shares today, what percentage change in the share price would he receive? b. What is the percentage change in the value of the euro versus the dollar over this same period? c. What would be the total return Spencer would earn on his shares if he sold them at these rates? d. What would be the total return on the Vaniteux investment by Laurent Vuagnoux, a Paris-based Investor? a. If Spencer sells his shares today, what percentage change in the share price would he receive? The shareholder return is % (Round to two decimal places) b. What is the percentage change in the value of the euro versus the dollar over this same period? The percentage change in the value of the euro versus the dollar is I (Round to two decimal places) c. What would be the total return Spencer would earn on his shares if he sold them at these rates? If he sold his shares today, it would yield the following amount in euros el (Round to two decimal places) The sales proceeds in US dollars is $(Round to the nearest cent) 1 The original investment (cost) of 300 shares in Vaniteux in eurosis (Round to two decimal places) The original investment (cost) of shares in US dollars, calculated at the original spot rate is $ (Round to the nearest cent) The rate of return on Spencer's investment, net proceeds divided by initial investment is 10% (Round to two deomal places) m d. What would be the total return on the Vaniteux investment by Laurent Viagnoux, a Parls-based investor? (Select the best choice below) O A. There is no currency risk, therefore Laurent earns the rate of return on the share price change and the percentage change in the value of the ouro versus the dollar over this same period, 68.1% OB. There is no currency risk, therefore Laurent earns the rate of return on the share price change, the capital gain on the Vanitoux shares alone, 681% OC. There is no currency risk, therefore Laurent earns the rate of return on the share price change and the percentage change in the value of the ouro versus the dollar over this same period, 72 35% OD. There is no currency risk, therefore Laurent earns the rate of return on the share price change the capital gain on the Vanitou shares alone, 72.35% Click to select your answer(s)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Multinational Business Finance

Authors: David K. Eiteman, Arthur I. Stonehill, Michael H. Moffett

14th edition

133879879, 978-0133879872

More Books

Students also viewed these Finance questions

Question

2. Speak in a firm but nonthreatening voice.

Answered: 1 week ago

Question

Identify and define the eight channels of nonverbal communication

Answered: 1 week ago