Financial derivatives, their use and impact on firm performance and value
AbstractThis paper wants to give a basic overview of arguments for and against of using the financial derivatives tools in the field of foreign exchange risk management. The case study shows, how the separate hedging instruments have impact on P & L statement. This paper discusses different relationship between the shareholders and management, in the matter of risk management, profit volatility restriction and finally performance measurement of management staff. This essay is focused on question whether hedging transactions influence firm value - stock price. At the conclusion, we discuss a research paper of S & P agency, concerning of relationship between applications of the financial derivatives and rating of companies operating in oil and gas sector.
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Bibliographic InfoArticle provided by University of Economics, Prague in its journal Ekonomika a Management.
Volume (Year): 2008 (2008)
Issue (Month): 2 ()
Postal: Redakce Ekonomika a management, Vysoká škola ekonomická v Praze, nám. W. Churchilla 4, 130 67 Praha 3
Find related papers by JEL classification:
- F31 - International Economics - - International Finance - - - Foreign Exchange
- G1 - Financial Economics - - General Financial Markets
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
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