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(solved) International Finance: Assignment

   

Added on  2020-05-16

10 Pages2501 Words59 Views
INTERNATIONALFINANCE

Carlsberg vs. HeinekenContents1.Foreign Currency Transaction Exposure faced by Carlsberg vs. Heineken.....................................21.1.Introduction...............................................................................................................................21.1.1.Carlsberg................................................................................................................................21.1.2.Heineken................................................................................................................................21.2.Transaction exposures of Carlsberg...........................................................................................31.2.1.Foreign currency exchange rate.............................................................................................31.2.2.Interest rate fluctuations.......................................................................................................31.2.3.Raw material risk...................................................................................................................31.2.4.Credit risk...............................................................................................................................41.3.Transaction exposures of Heineken...........................................................................................41.3.1.Foreign exchange currency rate fluctuations.........................................................................41.3.2.Credit risk...............................................................................................................................41.3.3.Commodity price risk.............................................................................................................41.4.Comparison of transaction exposures.......................................................................................51.4.1.Similar transaction exposures................................................................................................51.4.2.Different transaction exposures............................................................................................52.0. Tools for managing transaction exposures.....................................................................................62.1. Carlsberg.........................................................................................................................................62.2. Foreign exchange contracts............................................................................................................62.3. Heineken.........................................................................................................................................62.4. Cross-currency interest rate swap..................................................................................................62.5. Commodity Swaps..........................................................................................................................62.6. Forward exchange contracts...........................................................................................................73.0. Conclusion......................................................................................................................................84.0.References.......................................................................................................................................92

Carlsberg vs. Heineken1.Foreign Currency Transaction Exposure faced by Carlsberg vs. Heineken1.1.Introduction1.1.1.CarlsbergCarlsberg is an international brewer employing approximately 41000 people who are located in Eastern Europe, Western Europe, and Asia. The company was founded in 1847 and is headquartered in Copenhagen, Denmark. It is primarily engaged in the marketing, sale, and production of soft drinks and beer. Further, its portfolio comprises of a range of cider and beer brands including Baltika, Holsten, Carlsberg, Tuborg, etc. Carlsberg is also prevalent in various markets wherein it does not operate its own breweries through export and license business (Carlsberg, 2016).1.1.2.HeinekenHeineken is the leading marketer and developer of premium cider and beer brands with a strong portfolio of more than 250 global, local, and regional ciders and beers. The company iscommitted towards long-term brand investment, cost management, sales execution, and innovation. It employs around 73500 workforce who operates in more than 165 breweries, cider plants, malteries, and production facilities situated in around 70 countries. It was founded in 1864 in Amsterdam.3

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