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Case
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Reference no. F-0510-E
Published by: IESE Business School
Originally published in: 1993
Version: 02.1997
Length: 8 pages

Abstract

Ibersnacks provides a framework for introducing the analysis of financing costs for different currency choices. It allows for the measurement of foreign exchange risk and its impact on the firm''s financing costs as well as its operating margin. It also deals with the links between the firm''s competitive position and its choice of financing. The case provides the basis for discussion on the concept of ''economic exposure'' and describes how a domestic firm is exposed to foreign exchange risk. The teaching note is restricted to academic institutions only. This case was previously numbered 293-009-1.

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Abstract

Ibersnacks provides a framework for introducing the analysis of financing costs for different currency choices. It allows for the measurement of foreign exchange risk and its impact on the firm''s financing costs as well as its operating margin. It also deals with the links between the firm''s competitive position and its choice of financing. The case provides the basis for discussion on the concept of ''economic exposure'' and describes how a domestic firm is exposed to foreign exchange risk. The teaching note is restricted to academic institutions only. This case was previously numbered 293-009-1.

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