Foreign currency exposure and real option analysis


1) Last year, you bought the stock at a price of= $51.5 a share. Over course of year, you got $2 in dividends and inflation averaged 2.7%. Today, you sold your shares for $54.2 a share. What is your estimated real rate of return on this investment (note: usually you would use "Fisher Effect Formula", but in this case use "approximation formula"?

2) How do companies reduce their foreign currency exposure? What is real option analysis? Why is significant in M&A activities or is it? What forces drive international M & A activity, and how are these forces dissimilar from those which drive domestic M & As?

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Finance Basics: Foreign currency exposure and real option analysis
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