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VARMA, MOHIT KISHORE (2018) The Relationship between Foreign Currency Hedging and Firm Value for Top 500 U.S. Non-Financial Firms. [Dissertation (University of Nottingham only)]

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Abstract

The US economy has seen very volatile times over the past decade due to global events like US subprime crisis (2007-09), European sovereign debt crisis, oil prices fluctuations and Federal monetary policy speculations and changes, to name few. This has increased the pressure on US firms to manage their foreign currency risk exposure. The use of derivatives has been a common way of hedging this risk. This paper makes an attempt to provide a unique insight into the relationship of foreign currency hedging with firm value. Through a series of univariate and multivariate tests applied on a dataset of non-financial US firms from the S&P 500 and S&P 600 indices, the study found no significant relationship between foreign currency hedging and firm value. Other variables like return on assets (ROA), dividend yield and the ratio of long term assets to shareholders equity are found to be significantly correlated to firm value. This study further widened its approach by studying the effect of hedging during and post the financial crisis. The results showed a negative relationship during crisis and a positive relationship post crisis but were not significant. The paper also highlight the issues with reporting standards and provides recommendations for better regulations and scope for future research.

Item Type:	Dissertation (University of Nottingham only)
Depositing User:	Varma, Mohit
Date Deposited:	28 Nov 2022 14:52
Last Modified:	28 Nov 2022 14:52
URI:	https://eprints.nottingham.ac.uk/id/eprint/55151

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