Situation or problem
In 1993 they closed stores in the USA. UU Similarly, Carrefour had withdrawn from Japan, Mexico and South Korea. In 2005, Carrefour focused on price competitiveness, putting an end to discounts and generally applying low prices, with the main goal of recovering the French market.
The company Carrefour S.A. is a company with an international vision that decides not only to enter foreign markets, but to expand all over the world
Aiming at a global market with cultural, social, political, and legal differences, among other factors that can hinder the effective execution and implementation of marketing strategies and lack of understanding of clients at a global level given the cultural differences.
The CEO of Carrefour, Daniel Bernard, expressed his expectation that, in 2002, the company would increase sales by 5% at constant exchange rates and increase recurring net income by 10-15%. He stated that the company continued to gain market share in most of the countries where it operated. In each country, Carrefour operated mainly within the local economy when buying and selling products. Currency exposure in imported goods was generally hedged through currency futures contracts.
In 2001, Carrefour's total debt was EUR13,500 million, of which EUR6,400 million were in publicly traded bonds. Carrefour's debt was denominated in many currencies. Indebtedness in foreign currency was generally covered so that total debt requirements were currently 97% in euros. As the Carrefour administration considered the bond naming decision, it also considered the current environment of inflation, interest rates and the exchange rate. Over the past three years, long-term bond yields have declined in all four currencies. The interest rate of the Swiss franc, however, has consistently been the lowest rate. The decision also depends on future movements in exchange rates. In the last five years, the euro had depreciated against most major currencies. If this trend continues, paying debt in foreign currency with a cash flow in euros would be increasingly costly.
Based on the parity of forward rates, what is the cost of financing in Swiss francs, in pounds sterling, in US dollars?