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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.
Financial assets: Financial assets/instruments represent the financial obligations that arise when the borrower raises funds in the financial market. In exchange for the funds
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Disadvantages of IFRS 8 Reconciliations may be time consuming. Less comparable with other organisations, as every entity has a different way of running their business.
What are the time dimensions of the income statement, the balance sheet, and the statement of cash flows? Hint: Are they videos or still pictures? Explain. Sol. The i
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Q. What do you mean by Treasury Bills? Treasury bills (TBs) are short-term government securities. The usual practice in India is to sell treasury bills at a discount and redeem
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