Question

Problem 12: Osterfeld Inc. (NYSE Ticker symbol: OST) is a U.S.-based importer of European soccer gear. OST’s financials are the following: Enterprise value USD 50 million; total net debt USD 12 million out of that USD 2 million are EUR-denominated net debt. Assume that FX business exposure to the EUR is -1.40. OST also has a long position on a 3-year fixed-for-fixed USD/EUR swap with a notional of USD 4 million (assume this is an at-market swap). What is the FX equity exposure of Osterfeld Inc.?

Answer 1

And Enterprise value = 50 million USD In that Debt = 12 million v In that 2 million in EUR ( liab) for business expossure = f2 98 set - fx liability = fra asset - 2 mili : -1.40 -1.40 -1.40 i fa asset = Go millions dest therefore an fx exposure is - a million and total to business exposure is - 1.40 межRosure in Беѕе fSo fivn hqя Роя, iti fruity wooth (.60 million) Note & Enter Prise value = valie of twity & value of debt a