Instructions for Case "Jaguar plc, 1984

In July 1984, the British Government decided to privatize Jaguar plc. Jaguar sold over 50% of its cars in the United States, but its production was confined to Britain, so it was subject to considerable exchange rate exposure. Your task is to take into account the exposure in pricing the shares of Jaguar and value how much the firm is worth under serveral exchange rate scenarios.

Below is a list of questions you must address in your case analysis. For each answer, be sure to attach spreadsheets showing how you obtained the answer and describe any relevant calculations in your write-up. Be sure to as clear and concise as possible

4) Discuss how Jaguar could manage this exposure using foward contracts

What type of positions would they take and for how long

Consider the exposure (delta) of Jaguar to the

$/ rate for a u.s investor rather than a U.K

investor

Is the exposure to the dollar-based owners the same as that of the pound- based investors above ? why or why not ?