Question
Suppose that you work for Westinghouse Electric Company. You are bidding to design a new nuclear power station in Bulgaria. If you win the bid
Suppose that you work for Westinghouse Electric Company. You are bidding to design a new nuclear power station in Bulgaria. If you win the bid you will receive EUR 100,000,000. You have collected the following market data (I am using the most recent data on Feb.207,2021). Spot: USD 1.2073/EUR Forward: USD 1.2180/EUR 12-month USD Libor: +0.28375% 12-month EUR Libor: -0.48014% WACC: 6% Call option: strike price USD 1.2300/EUR, premium USD 0.0245/EUR Put option: strike price USD 1.2300/EUR, premium USD 0.0306/EUR Note: how to compute the call premium: 0.0245*100,000,000
Compute the revenue if you hedge with a forward.
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Your Money Your Impact Connect With Your Values And Design A Financial Plan That Leaves A Lasting Legacy
Authors: Lynn Whetham
1st Edition
1781337497, 978-1781337493
