Ivey Publishing
Leveraged Buyout (LBO) of BCE Inc.: Hedging Currency Risk
Product Number:
9B08N023
Publication Date:
01/20/2009
Length:
7 pages (5 pages of text)
Product Type:
Case (Library)
Source:
Ivey
In 2007, an analyst in the derivatives group of investment bank Grenfeld & Co. was asked to devise a hedging strategy for Providence Equity Partners (Providence) in Bell Canada Enterprises (BCE Inc.). Providence was based in the United States and any strategy would involve significant foreign exchange rate risk due to the conversion of returns into U.S. dollars. The analyst needed to consider several long-term hedging strategies that Grenfeld & Co. could recommend to Providence. Her vice-president had asked that she create a hedging strategy by initially assuming a 25 per cent IRR for the investment and its performance, based on two outcomes at the end of the investment (investment horizon = five years): a zero per cent IRR and a 25 per cent IRR.
Issues:
Disciplines:
Finance,  International
Industries:
Information, Media & Telecommunications
Setting:
North America, Large, 2007
Intended Audience:
Undergraduate/MBA
Price:
$5.30 CAD / $5.00 USD Printed Copy
$4.50 CAD / $4.25 USD Permissions
$4.50 CAD / $4.25 USD Digital Download
Associated Materials
Supplements: 7B08N023 (148 KB)
You Might Also Like...

Save In: