Saller Co Has a Subsidiary in Mexico

question 42

Multiple Choice

Saller Co. has a subsidiary in Mexico. The expected cash flows in pesos to be received in the future from this subsidiary have not changed since last month, but the valuation of Saller Co. has declined since last month. What could have caused this decline in value?

• A) a weaker Mexican economy
• B) lower Mexican interest rates
• C) depreciation of the Mexican peso
• D) appreciation of the Mexican peso

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