Question

In: Finance

Currency analysis of Merck & Co. Why you can say Euro and Yen are exposed to...

Currency analysis of Merck & Co.

Why you can say Euro and Yen are exposed to the company. This can be due to its business structure (i.g. location of factories, customers and suppliers, and the currency that the products/services are quoted), and arising from the competition against its rivals.

State references.

Solutions

Expert Solution

Merck & co is an American multinational pharmaceutical company which has exposure in European markets as well as Japanese market so they are having their medical facilities in European Markets and Japanese markets as well so there medicines are sold in these Markets and it can be said that the receivables are generated in euros and Yen respectively for this company.

This is due to the location of the factories as well as there are consumers and suppliers as well in those countries and there are local competitors available also for Merck and hence they will be exposed to currency fluctuations of Yen well as euros .

Merck is having their major operations in American markets and if their receivables are in euros and Yen and when there would be divergence of dollar against these currencies and there will be depreciation of their foreign currency like Euro & Yen, then the overall receivables for the company will be decreasing and it can be said that it will be leading to decrease in the margin for the company so it is exposed to the currency fluctuations of Yen and euros.

Merck & co is having a major supply in Europe and Japanese market and they have even established their factories in order to counter the rate of exchange fluctuation due to domestic set off, and hence their receivables has been hedged to certain extent but they need to incorporate these transaction in their main parent books and hence it can be said that they are exposed to the volatility of the exchange rate of Yen and Euros in respect to the dollars.


Related Solutions

Foreign currency analysis of Merck & Co. which is s an American multinational pharmaceutical company and...
Foreign currency analysis of Merck & Co. which is s an American multinational pharmaceutical company and one of the largest pharmaceutical companies in the world. Explain the relationship between the stock price of the company and those three currencies, Euro, Yen, and Renminbi which are the most exposed to the company and how sensitive the company's value is against the change in the value of the three foreign currencies against US dollar. State references.
Foreign currency analysis of Merck & Co. which is s an American multinational pharmaceutical company and...
Foreign currency analysis of Merck & Co. which is s an American multinational pharmaceutical company and one of the largest pharmaceutical companies in the world. Explain the business activities and environment of Merck & Co. from the perspective of foreign currency and identify three currencies that Merck & Co. is exposed against. This can be due to its business structure (i.g. location of factories, customers and suppliers, and the currency that the products/services are quoted), and arising from the competition...
KEY CURRENCY CROSS RATES (09/16/2011) Country US $ Euro Pound Sfranc Peso Yen Can $ Canada...
KEY CURRENCY CROSS RATES (09/16/2011) Country US $ Euro Pound Sfranc Peso Yen Can $ Canada 0.9782 1.3496 C 1.1173 0.0749 0.0127 1 Japan 76.79 105.9465 121.2346 87.7099 5.8829 1 78.5013 Mexico 13.0531 B 20.608 14.9093 1 0.17 13.344 Switzerland A 1.2079 1.3822 D 0.0671 0.0114 0.895 U.K. 0.6334 0.8739 1 0.7235 0.0485 0.0082 G E.U. 0.7248 1 1.1443 0.8279 0.0555 F 0.741 U.S. 1 1.3797 1.5788 1.1422 E 0.013 1.0223 KEY CURRENCY CROSS RATES (MOST RECENT) Country US $...
Choose one major global currency among the euro, the Japanese yen, the British pound, the Chinese...
Choose one major global currency among the euro, the Japanese yen, the British pound, the Chinese yuan, the Canadian dollar, the Australian dollar, the Mexican peso and the Swiss franc and explain the economic factors that have affected its price in US dollars during the past 3 months.
(Currency options) Suppose you are importing clothes from Japan and you have Yen 6,250,000 payable due...
(Currency options) Suppose you are importing clothes from Japan and you have Yen 6,250,000 payable due in 90 days. The current spot rate is $0.005 per Yen. The 90-day forward rate is 0.0054. Currently, the currency option market offers Yen call option with a maturity date in 90 days and a strike price of 0.0053. The premium of this option is $0.0002/yen. Note that one unit of Japanese Yen option contract is 6,250,000 Yen. You are considering two possible hedging...
c. Explain the concept of ANOVA, and say how you can conduct an ANOVA analysis for...
c. Explain the concept of ANOVA, and say how you can conduct an ANOVA analysis for the wages/salaries of three categories of workers in your firm. Use an example to illustrate. Clearly indicate the F-Statistic and the Critical Value and their meanings
what can you say about the economy, culture and religion of FRANCE? can you say something...
what can you say about the economy, culture and religion of FRANCE? can you say something about it? please give an example for each type. thank you so much. needed for my assignment.
Say you are a currency trader. You know from your Bloomberg database terminal that the spot...
Say you are a currency trader. You know from your Bloomberg database terminal that the spot rate is US$0.8545 = NZ$1, NZ Treasury Bills offer a return of 5 percent per anum, US Treasury Bills offer 2 percent per anum, and the one year forward rate is US$0.8224. NewZealand dollar is domsetic currency. a) Say you are trying to work out if the current forward rate to see if the markets are in equilibrium, or they are in disequilibrium and...
Why are you applying to the nursing program? - Have you been exposed to the career...
Why are you applying to the nursing program? - Have you been exposed to the career path before to know that you will be willing to work in that role? - Do you have volunteer experience or or extracurricular activities that can show your strong desire/readiness for the program and subsequent career? - Something interesting about you that a person who interacts frequent with you should know. Why are you applying to the program? - Have you been exposed to...
Who do you think are the "sellers" of domestic currency? Why do they sell domestic currency?...
Who do you think are the "sellers" of domestic currency? Why do they sell domestic currency? You may choose to list several different possible sellers (list seller categories).
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT