Which are dependent on the exchange rates at which the


Thaitone Co, a multinational corporation based in Thailand has substantial translation exposure in Canadian subsidiaries. The treasurer of Thaitone suggests that the translation effects are not relevant because the earnings generated by the Canadian subsidiaries are not being remitted to the parent in Thailand, but are simply being reinvested in Canada. Nevertheless, the vice president of finance of Thaitone is concerned about translation exposure because the stock price is highly dependent on the consolidated earnings, which are dependent on the exchange rates at which the earnings are translated Who is correct? Explain.

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Financial Management: Which are dependent on the exchange rates at which the
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