HELP Please

Question 2 The Board of Directors for Columbia Timber, a US company is meeting on Monday morning custom 1. The company has a customer in Germany with whom it has signed a turo som contra opplywood timber. Payment from the new made months after each shipment 2. The company needs to decide on its dividend for this year in view of the results achied You are required to advise the management on these matters Required: Answer all parts. A Columbia Timber would like to understand the risk it is now exposed to with the German deal 1. Explain the type of foreign exchange risk which Columbia Timber is exposed to. (Smarks) 2. Explain how Columbia Timber could hedge its exposure using a forward contract. 15 marks) 3. Identify and explain any ONE argument against hedging foreign exchange risk. 15 marks) B. Columbia Timber finance director proposed to issue the following statement to the company's shareholders "Columbia Timber is holding its final dividend in line with last year despite a 40% fall in pre-tax profits for this year in view of the global recession. The company who the dividend at 12.25 cents per share for this year. We have great confidence in the company's position to exit the recession strony. We have promising opportunities new sustainable forests in Alaska which will allow us to be a market leader in light of the new trend towards greener resources The company has reported falling sales across most of the company's markets. 1. Explain the signaling theory with reference to the proposed dividend statement prepared by Columbia Timber finance director.marics) 2. Identify the factors which shareholders are likely to take into account when they read the proposed statement is marks) 3. In your view, would shareholders be convinced to hold on to the stocks by the company's decision to keep dividends in line with last year maries 3 (120) v TS TT T Arial