Freedom Energy Group (Scenario)
Freedom Energy Group (FEG) is a major American energy services group based in Oklahoma. FEG manufactures products to facilitate oil and gas exploration and is involved in the construction of oil refineries and gas pipelines around the world. FEG managers are considering the purchase of a Canadian energy firm, Maple Leaf Energy, which manufactures pipeline stabilization products. The financial management division of FEG is considering the risks and benefits of purchasing Maple Leaf.
-Which of the following should most likely be considered by financial managers before FEG purchases Maple Leaf?
A) How will environmentalists react to the purchase of Maple Leaf by FEG?
B) Should FEG integrate the Maple Leaf logo into the FEG marketing campaign?
C) What is the best way for FEG to manage currency fluctuation between U.S. dollars and Canadian dollars?
D) How will NAFTA affect the legal negotiations between FEG and Maple Leaf?

Question

Quizplus · Accepted Answer

Financial managers should consider how to manage currency fluctuations between U.S. dollars and Canadian dollars, as this can significantly impact the financial outcomes of the acquisition.