You are a consultant at a major investment institution. Your institution has a long-standing business relationship...

Transcribed Image Text:

You are a consultant at a major investment institution. Your institution has a long-standing business relationship with Humberside plc, which is listed on the London Stock Exchange. A new CEO has just been appointed at Humberside plc, she is very ambitious and wants to increase the market value of her company as much as possible. She believes that she has an excellent strategy for the core business of the company. She is, however, rather worried that the risk management and financial issues may cause the share price of her company to underperform. She has commissioned you to write a briefing report explaining the following matters: i) What are the main financial and other risks she needs to be aware of and how these may affect the market value of the company? ii) Explain how the use of derivatives impact on the company's risk. You need to write the literature review about the role of derivatives in decreasing (increasing) the corporate risk. You are a consultant at a major investment institution. Your institution has a long-standing business relationship with Humberside plc, which is listed on the London Stock Exchange. A new CEO has just been appointed at Humberside plc, she is very ambitious and wants to increase the market value of her company as much as possible. She believes that she has an excellent strategy for the core business of the company. She is, however, rather worried that the risk management and financial issues may cause the share price of her company to underperform. She has commissioned you to write a briefing report explaining the following matters: i) What are the main financial and other risks she needs to be aware of and how these may affect the market value of the company? ii) Explain how the use of derivatives impact on the company's risk. You need to write the literature review about the role of derivatives in decreasing (increasing) the corporate risk.