Essay Available:
page:
2 pages/≈550 words
Sources:
0
Style:
APA
Subject:
Accounting, Finance, SPSS
Type:
Research Paper
Language:
English (U.S.)
Document:
MS Word
Date:
Total cost:
$ 11.23
Topic:
Microsoft's Derivatives and Its Objectives
Research Paper Instructions:
• Report on the derivatives that are being used by one selected company. Please specify what are these contracts and what was (were) the objective(s) behind them. To structure your report, you can identify the company's approach based on 2 of the 4 market variables (i.e., exchange rates, interest rates, commodity prices and equity prices).
• Please choose 1 company in total (i.e., one from either of these stock exchanges: (i) TSX; (ii) NASDAQ and (iii) NYSE). You may choose any company you like (i.e., Non-Financial and Financial). Please limit your write-up to 1 page for the company (excluding appendices). (You are encouraged to use the company's website - annual reports.)
Research Paper Sample Content Preview:
Microsoft Financial Contracts
Student's Name
Institution/Affiliation
Course
Professor
Date.
Microsoft Financial Contracts
Microsoft's Derivatives and Its Objectives
The goals of holding derivatives include minimizing, eliminating, and effectively managing the financial impact of these exposures (Cao et al., 2021).
Foreign Currency
Microsoft tracks its exposure to foreign currencies daily to enhance the economic efficiency of its foreign currency hedging positions. Option and forward contracts are used to hedge a percentage of projected up to 3 years in the future for its international revenue. The Canadian dollar, the British pound, the Japanese yen, and the euro hedge the main currencies. In contrast to the preceding year's 15% effective tax rate, the current quarter's rate was 18% (Microsoft, 2022).
Equity
The corporation may occasionally utilize and designate stock derivatives as swaps, calls, and forwards as hedging instruments to protect against price risk. According to Microsoft's annual report (2022), as of June 30, 2022, and 2021, the value of equity interests was $6.9 billion and $6.0 billion, respectively.
Interest Rate
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