Groupe Ariel S.A.: Parity Conditions and Cross-Border Valuation (Brief Case). Groupe Ariel. BZ. Beth Zimmerman. Updated 18 Parity Conditions and Cross- Border Valuation. Groupe Ariel S.A.. About Groupe Ariel. How should Groupe Ariel finance the project? In pesos Will this affect your conclusions on whether Groupe Ariel should approve the project?.

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Note that Exhibit 2 is stated in pesos, not thousands of pesos! Access this item You must be logged in to view this material. View our pricing guide or login to see prices.

Try different assumptions regarding inflation rates. There is no unique correct solution. Need to generate a peso discount rate.

A case study Groupe Ariel S.A.: Parity conditions and cross-border valuation.

The following questions should support your analysis of the case and help structuring the so- lution. Tax ID No What is rgoupe result in part 1 if you assume parity conditions to hold? Should Groupe Ariel approve the equipment purchase? Please find below the full details of the product you clicked a link to view.

Include hedging and financing considerations into your discussion and recommendation. Parity conditions and cross-border valuation.

Registration Forgot your password? Share buttons are a little s.a.pairty lower. Download ppt “A case study Groupe Ariel S. Please formulate your solution in up to 8 pages Times New Roman 12pt, spacing 1. The old equipment is sold in year 0 forpesos, but the book value iscross-bordre.


The modifications to its capital budgeting procedures are partly intended to support the company’s efforts to continue this success. Remember me on this computer. Enter the email address you signed up with and we’ll email you a reset link.

After-tax cost savings are affected Crozs-border exhibit 4. If PPP holds, If purchasing power parity is expected to hold, then the best prediction for the vvaluation spot rate should be. One of the questions confronting the analyst at headquarters in Mulhouse, France, is whether to perform this analysis in Euros or pesos.

When parity does not hold, the two approaches can give very different answers and may even cause managers at headquarters and in the subsidiary to disagree about whether s.a.parity project should be undertaken. It states that the cost of living in different countries is equal and exchange rates adjust to offset inflation differentials across countries.

The actual 1-year and 2-year forward rates at the date of the case were MXN The quality of your solution depends on the depth of your analysis and the clarity and correctness of your arguments.

Groupe Ariel Questions | Gabriela Selejan –

Cite View Details Purchase. You can change your cookie settings at any time but parts of our site will not function correctly without them. Vaaluation Center Find new research papers in: What is its effect on the concluded NPVs? Technology and Operations Management. Finance General Management Marketing. Explain your cash flows do not miss the tax effects and the choice of discount rates. Suppose Ariel expects a significant real depreciation of the peso against the Euro.


This generates a loss of 75, pesos. The Case Centre is dedicated to advancing the case method worldwide, sharing knowledge, wisdom and experience to inspire and transform business education across the globe.

Groupe Ariel Case by Amanda Wang on Prezi

Teaching Note HBS Case Condihions January Revised October Tombstones This case consists primarily of excerpts from term sheets and prospectuses for six securities offerings made by US companies duringjust after the financial crisis and recession of My account New to The Case Centre?

Explore the relevance and influence of assumptions regarding parity conditions. There are three issues of senior unsecured notes, one floating rate note, one equity offering, and one convertible note.

How should Martin incorporate such an expectation into his NPV analysis? Go to advanced search.

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