The final project for this course is the creation of a Foreign Exchange Rate Risk Management in Multinational Enterprise in Business Strategy. You will examine how a multinational enterprise (MNE) uses foreign exchange risk management in its business strategy
The final project for this course consists of two major components. The first component is a Case Study Briefing document that focuses on a case study of foreign exchange risk management techniques currently used in a multinational enterprise (MNE). You will complete a briefing document in Module Five that focuses on the risk management techniques currently used in the MNE that you have chosen. Within this document, you will address the background and nature of the company’s business, the exposure to foreign exchange rate the company faces (i.e., through its accounts payable because it imports, through its accounts receivable because it exports, or through both accounts), and the tools or techniques the company currently uses to mitigate those risks (i.e., the company uses foreign debt to hedge the currency exposure, using derivatives such as currency swaps, futures, forwards, or options, for only a certain number of months to hedge only a certain percentage of the exposure, etc.).
The second component is a Subsidiary Expansion or an Investment document that focuses on your research to expand this MNE into a new country. The country could be the country in which the MNE is currently located. Or, it could be any country that you are interested in expanding into. Within this document, you will address the capital structure of the new subsidiary and, if the company has debt financing, from where or which currency you would get the debt financing, and why. Once the company breaks even and starts making a profit, how would you manage the profit (i.e., need to invest for expansion for growth or because of restrictions on blocked funds, repatriate back to the mother company annually because you are not certain of the country and currency risk, etc.)?
The project is divided into two milestones, which will be submitted at various points throughout the course to scaffold learning and ensure quality final submissions. These milestones will be submitted in Modules One and Five. The final submission will be in Module Nine