Walt disney expects to receive a mex16 million theatrical, Ask an Expert

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Walt Disney expects to receive a Mex$16 million theatrical fee from Mexico in 90 days. The current spot rate is $0.0915/Mex$, and the 90-day forward rate is $0.0903/Mex$.

a. What is Disney’s peso transaction exposure associated with this fee?

b. If the spot rate expected in 90 days is $0.0908, what is the expected U.S. dollar value of the fee?

c. What is the hedged dollar value of the fee?

d. What factors will influence the hedging decision?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92688899

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