Comparing Degrees of Translation Exposure
Response to the following problem:
Nelson Co. is a U.S. firm with annual export sales to Singapore of about S$800 million. Its main competitor is Mez Co., also based in the United States, with a subsidiary in Singapore that generates about S$800 million in annual sales. Any earnings generated by the subsidiary are reinvested to support its operations.
Based on the information provided, which firm is subject to a higher degree of translation exposure? Explain.