The Vaniteux Returns (A): Spencer Grant is an investor based in New York. He has closely followed
Question:
The Vaniteux Returns (A): Spencer Grant is an investor based in New York. He has closely followed his investment in 100 shares of Vaniteux, a French company that went public in February 2010. When he bought 100 shares of his at €17.25 a share, the euro was trading at $1,360/ euro. Currently, the share is trading at 28.33 euros per share, and the dollar has fallen to 1.4170 $/euro.
Required:
a. If Spencer sells his stock today, what percent change in stock price would she receive?
b. What is the percentage change in the value of the euro against the dollar during this same period?
C. What would be the total return Spencer would earn on her shares if she sold them at these rates?
d. Spencer Grant decides not to sell her shares at this time. Hold on, expecting the stock price to rise further after the quarterly earnings announcement. His expectations are correct and the share price rises to 31.14 euros per share after the announcement. Now you want to recalculate your returns. The current spot exchange rate is $1.3110/euro. Using the same prices and exchange rates as in problem d, what would be the total return on investment in Vaniteux by Laurent Vuagnoux, an investor based in Paris?
Multinational Business Finance
ISBN: 978-0133879872
14th edition
Authors: David K. Eiteman, Arthur I. Stonehill, Michael H. Moffett