Exchange Rate Exposure of Company Value

Abstract

Author: M S Bobrovskaya - National Research University "Higher School of Economics."

The article reviews existing approaches to exchange rate exposure estimation in the process of company valuation using the discounted cash flows method (DCF model). It justifies the preference of the approach, which is based on estimation of the cash flows exposed to currency risk based on anticipated exchange rates. Implementation of the respective approach in company valuation is demonstrated using imitating modeling.