Question

In 1990, Matsushita bought MCA Inc. for $6.1 billion. At the time of the purchase, the exchange rate was about ¥145/$. By the time that Matsushita sold an 80% stake in MCA to Seagram for $5.7 billion in 1995, the yen had appreciated to a rate of about ¥97/$.
a. Ignoring the time value of money, what was Matsushita's dollar gain or loss on its investment in MCA?
b. What was Matsushita's yen gain or loss on the sale?
c. What did Matsushita's yen gain or loss translate into in terms of dollars? What accounts for the difference between this figure and your answer to part a?



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  • CreatedJune 27, 2014
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