Why would the management of a multinational corporation incur real costs to hedge accounting exposure, which is only on paper?
A. Fluctuations in reported income may affect stock price.
B. Management compensation may be tied to accounting income.
C. Hedging can smooth income.
D. all of the above
Answer:D
Why would the management of a multinational corporation incur real costs to hedge accounting exposure, which is only on paper?
A. Fluctuations in reported income may affect stock price. B. Management compensation may be tied to accounting income. C. Hedging can smooth income. D. all of the above