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Consider Samuel Co., a U.S.-based MNC that must pay 3 million Thai baht to a supplier in Thailand. The payment is due in 3 months,
Consider Samuel Co., a U.S.-based MNC that must pay 3 million Thai baht to a supplier in Thailand. The payment is due in 3 months, but Samuel believes the baht will appreciate over those 3 months. Moreover, forward contracts and other hedging strategies are not available to the MNC. However, since (hypothetically) the Hungarian forint is highly correlated with the Thai baht, the MNC purchases forint forward and plans to use that forint to exchange for baht when the payable is due.
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Financial Accounting and Reporting a Global Perspective
Authors: Michel Lebas, Herve Stolowy, Yuan Ding
4th edition
978-1408066621, 1408066629, 1408076861, 978-1408076866
