possible future crises and changing government policies relevant to foreign investments. Furthermore‚ because of the ending of the convertibility law Dow also had to consider a possible exchange-rate risk. Dow created a holding company‚ Dow Investment Argentina‚ to invest in the project‚ then they had to decide whether they will use general corporate funds or raise debt for the PBB bid. 2. Statement of problem 3.1 General analysis Rational for Acquisition of PBB Dow Chemical’s corporate strategy
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relatively high inflation. Even though inflation would cause the peso value of the Mexican products to rise‚ the devaluation means that it takes less foreign currency to buy the pesos‚ thus allowing the Mexican products to remain competitive. One interesting ramification of a peso depreciation is the impact of the cheaper Mexican goods on exporters from other countries. For example‚ the cheaper Mexican goods flooding the market in Argentina might take away market share from Italian exporters‚ thus affecting
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power theory; suppose that one US dollar is currently in the market for ten Argentinean pesos. In the United States a soccer ball costs $40 while in Argentina they sell the same soccer ball at 150 pesos. Since 1 US dollar is the same to 10 pesos‚ the soccer ball that in United States you could buy for $40 bucks and 15 pesos if we buy it in Argentina. There’s an advantage of buying the soccer ball in Argentina this will bring some upsets to the soccer ball market in the US. Getting back to the big
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Brazilian industrial conglomerate. The subsidiary is Paginas Amarelas‚ which operates in three Latin countries such as Argentina‚ Brazil‚ and Chile. All cash flows have been converted to U.S. dollars‚ and present values computed for various discount rates. In order to the present value properly‚ he should determine the appropriate target rate of returns for dollar flows originating in Argentina‚ Brazil‚ and Chile. Q1. What is the valuation problem here? In what currency are the cash flows denominated
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regions were affected. • The best-known of these crises are those that hit Latin America in the 1980s‚ Mexico in the mid-1990s‚ several Asian countries in the late 1990s‚ most transition economies in the mid-1990s‚ Russia in the late 1990s‚ and Argentina in 2002. Types of financial crisis • Currency crises - occur when an attack on the exchange rate of an economy’s currency results in a devaluation or sharp depreciation of the currency • Banking crises- occur when bank runs or failures force
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I - In Overture: Argentina – Economic Status & Early Signs of a Crisis to Come: Today‚ Argentina is arguably revered as the second largest economy in South America‚ after Brazil‚ and even considered as a considerable economic power in the world. That economy has been measured and weighed heftily‚ mainly due to a transformation of the political system that governs it. Up until 1983‚ the country was headed by a succession of military regimes‚ a state of affairs resulting in the economy being brought
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BSAD476-H1WW Week 6: Globalization and Implementation Plan JC Global Implementation Plan Home Depot in Argentina Table of Contents Introduction Home Depot .................................................... 3 Argentina .................................................... ... 4 International Analysis 5-6 Market Considerations 6-7 Entry Modes
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culminated in the eventuation of the Mexican currency crisis‚ the first of which occurred on December 20‚ 1994. This day‚ widely recognised as beginning of the crisis marked the devaluation of the Peso to the Dollar by Mexican President Ernesto Zedillo by approximately 15% to relieve the pressure on the Peso/Dollar exchange rate. This decision‚ which was made without consultation with the US Government or the International Monetary Fund‚ was not accompanied by supporting fiscal or monetary measures
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• Drastic Budget Reductions • Radical restricting of the public sector and reduction in its spending • Government spending slashed • Import tariffs were cut • Government budgets were balanced Decree 21060 • Allowing the peso to float against the dollar • Cutting 2/3 of the employees of the state oil and tin companies and implementing a freeze on • Ending price controls and eliminating subsidies to the public sector • Liberalizing import tariffs by imposing
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MERCOSUR How would a Mexican company trying to enter the Argentine market proceed and what difficulties would it have to face? Mexico MERCOSUR Source: Based on http://www.mapaamericalatina.com‚ 13 February 2013 INTERNATIONAL BUSINESS Professor: Paul Meyer Written by: Alison del Olmo & Alejandra Barrera Cárdenas Deadline: 1st March 2013 TABLE OF CONTENTS EXECUTIVE SUMMARY..................................................................................................3 ABBREVIATIONS
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