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How foreign currency risk can affect the value of a multinational company?
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- Impact of Foreign Currency and Interest Rates on Company ProfitabilityWhen a firm enters a transaction that need to be settled in foreign currency, what are the risks that they are exposed to? What are the possible ways for a firm to avoid those risks and what will be the effect?How political risk can affect the value of a multinational company?
- under what circumstances can how an international company can use 'leads and lags' to protect itself against foreign exchange risk.What adjustments might be made due to exchange rate riskand political risk to the domestic cost of capital for a foreigninvestment?What modifications may be made to the domestic cost of capital for a foreign venture to account for currency rate and political risk?