Consider a company, based solely in the UK, which buys its raw material and sells its finished
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Consider a company, based solely in the UK, which buys its raw material and sells its finished goods in the domestic market. While not facing any transaction risk or translation risk, it faces domestic competition from a US company. If the pound appreciates against the dollar, reducing the sterling cost of the US company’s dollardenominated imports, the UK company will lose its competitive edge.
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Corporate Finance Principles And Practice
ISBN: 9781292450940
9th Edition
Authors: Denzil Watson, Antony Head
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