Leveraged Buyout (LBO) of BCE.: Hedging Security Risk Harvard Case Solution & Analysis

In 2007, an analyst at investment bank derivatives group Grenfeld and Co. were asked to develop a hedging strategy for Providence Equity Partners (Providence) at Bell Canada Enterprises (BCE Inc.) Providence was founded in the United States and any strategy involves significant currency risk converting back to U.S. dollars. The analyst must consider a number of long-term hedging strategies that Grenfeld and Co. could recommend to Providence. Its vice-president said that it creates a hedging strategy of initially assuming 25 percent IRR for investments and their performance, based on the results at the end of the two investments (investment horizon = five years):) zero percent and 25 percent IRR IRR. "Hide
by Colette Southam, Ahsen Amir Ali, Sameer Meghji Source: Richard Ivey School of Business Foundation 7 pages. Publication Date: 06 January 2009. Prod. #: 908N23-PDF-ENG

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