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Should a firm hedge? Why or why not?
Answer: Firms may not need to hedge exchange risk in a perfect capital market. But firms can add to their value by hedging if markets are not perfect. First, if management identify about the firm’s exposure better than shareholders, the company, not its shareholders, should hedge. Second, firms may be capable to hedge at a lower cost. Third, if default costs are important, corporate hedging can be justifiable because it decreases the probability of default. Fourth, if the firm faces progressive taxes, it can decrease tax obligations by hedging which stabilizes corporate earnings.
How would you judge the potential profit of Bajaj Electronics on the first year of sales to booth Plastics and give your views to increase the profit?
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For this assessment, you will be required to select a role within the financial services industry that interests you. Undertake your own research to find out about the role you hav
Discuss the applicability of an operating cycle in cabbage growing business in Uganda.
The Central Bank is an authority responsible for monetary policy of its country. It regulates money supply and credit, issues currency, and manages exchange rate.
What are retained earnings? Why are they important? Retained earnings denote the sum of all the earnings obtainable to common stockholders of a business throughout its whole h
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