Groupe Ariel S.A.: Parity Conditions and Cross-Border Valuation (Brief Case). Groupe Ariel. BZ. Beth Zimmerman. Updated 18 Parity Conditions and Cross- Border Valuation. Groupe Ariel S.A.. About Groupe Ariel. How should Groupe Ariel finance the project? In pesos Will this affect your conclusions on whether Groupe Ariel should approve the project?.

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The row of future exchange rates shows no change in currency values because inflation is the same in both countries.

Groupe Ariel S.A.: Parity Conditions and Cross-Border Valuation

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A case study Groupe Ariel S.A.: Parity conditions and cross-border valuation.

Go to advanced search. Ariel requires a DCF analysis and an estimate of NPV for capital expenditures of this size in its newer foreign subsidiaries. The Case Centre is dedicated to advancing the case method worldwide, sharing knowledge, wisdom and experience to inspire and transform business education across the globe.

The actual 1-year and 2-year forward rates at the date of the case were MXN Teaching Note HBS Case Collection January Revised October Tombstones This case consists primarily of excerpts from term sheets and prospectuses for six securities offerings made by US companies duringjust after the financial crisis and recession of Tax ID No Compare the two sets of calculations and the corresponding NPVs.


Groupe Ariel Questions | Gabriela Selejan –

Check as far as possible to what extent relative purchasing power parity and interest cros-sborder parity is reflected in the historic data given in the case. Finance General Management Marketing.

Please formulate your solution in up to 8 pages Times New Roman 12pt, spacing 1. The modifications to its capital budgeting procedures are partly intended to valuatino the company’s efforts to continue this success.

All fields Reference no. The Case Centre is a not-for-profit company limited by guarantee, registered in England No and entered in the Register of Charities No Need to generate a peso discount rate.

Groupe Ariel evaluates a proposal from its Mexican subsidiary to purchase and install cost-saving equipment at cross-boreer manufacturing facility in Monterrey. Remember me on this computer.

My account New to The Case Centre? A major challenge for the analysis is deciding which currency to use, the Euro or the peso. What if you apply alternative assumptions not consistent with parity? ggroupe

Help Center Find new research papers in: Discount peso cash flows at a Peso discount rate and convert the NPV. This generates a loss of 75, pesos. You can change your cookie settings at any time but parts of our site will not function correctly without them. Feedback Privacy Policy Feedback.


Groupe Ariel Case by Amanda Wang on Prezi

Product details Share this page: Parity Conditions and Cross-Border Valuation. By continuing to use our site you consent to the use of cookies as described in our privacy policy unless you have disabled them. The following questions should support your analysis of the case and help structuring the so- lution. Try different assumptions regarding inflation rates. Download ppt “A case study Groupe Ariel S. When parity does not hold, the two approaches can give very different answers and may even cause managers at headquarters and in the subsidiary to disagree about whether the project should be undertaken.

This is because the new equipment would have a useful life of 10 years. One of the questions confronting the analyst at headquarters in Mulhouse, France, is whether to perform this analysis in Euros or pesos.