FIN 456/556 CORPORATE RESEARCH PAPER
Required of all students
Due at the time of our final exam. This paper should have 5-8 pages of narrative (3,000 â€“ 4,000 words), plus exhibits. Place particular emphasis on risk management and offshore borrowing/investing activities. Every student must use a different publicly traded, multinational firm as the subject for their paper. Here are some examples:
Ford Motor Co.
- What is the global reach of the corporation? Detail the number of overseas subsidiaries, the geographic breakdown of sales, assets and income, and their involvement in international trade.
- What is the companyâ€™s Foreign Exchange (FX) Risk Management Policy?
- Is centralized or decentralized?
- Head Office, Regional Offices, or Operating Subsidiaries
- What types of exposure are measured and managed?
- Translation, Transaction and Economic or Operating Exposure
- How has â€œOther Comprehensive Incomeâ€, an equity account, changed
in recent years?
- What hedging transactions are used for each type of exposure?
- Forward Contracts, Futures, Options and Swaps
- Cash Flow, Fair Value and Net Investment Hedges
- How long a time frame is used to manage this risk?
- One year, several years etc.
- How does the company use derivatives for funding, investing, and other price risks?
What is the extent of the companyâ€™s offshore and Euromarket funding and investing activities?
Conclusion: How effective is this firmâ€™s international financial strategy? How have they created value with it? How have they destroyed value with it? What do you believe will be the future result of continuing to follow this strategy?
Sources: You should have at least three sources, plus the companyâ€™s published financial report & associated notes. List any sources of data or information used in creating this paper. Make sure to use the companyâ€™s 10-k as one of the sources.