Hudson Co., a U.S. firm, has a subsidiary in Mexico, where political risk has recently increased. Hudson's best guess of its future peso cash flows to be received has not changed. However, its valuation has declined as a result of the increase in political risk. Explain.© BrainMass Inc. brainmass.com October 10, 2019, 5:14 am ad1c9bdddf
The valuation changed as a result of political risk because political risk always brings financial uncertainty. While there has been no change in cash flows, the problem with ...
This solution discusses the Hudson Co: Valuation of a multi-national corporation case. Political risk, future cash flow related to the peso, and valuation are discussed.