I’m working on a business case study and need an explanation and answer to help me learn.
1. The Setting: Mondi plc and Exchange-Rate Regimes. Analyze Mondi plc and the
economic environment in which they are operating. Pay particular attention to the company’s
recent performance, its growth strategy, and the global nancial markets which aect the
Group.
(a) How well has the company been doing? Propose a metric and assess the Group’s overall
performance since it spino from its former parent Anglo-American plc.
(b) What is Mondi’s strategy? How has it expanded and grown? How successful has this
growth strategy been and how is it aecting the current performance of its major divi-
sions?
(c) Scandinavian countries have followed very dierent paths in response to the introduction
of the Euro (EUR). Finland decided to join the common currency, Sweden adopted a
free oating regime for the Krona (SEK), and Denmark pegged its currency, the Danish
Krone (DKK), to the Euro whereas Norway and Iceland, who are only associated with
the EU, retain full independence in monetary and economic aairs. Focusing on the
DKK and SEK,
Dene pegged and oating exchange-rate regimes, respectively.
What are the advantages and disadvantages of xed and oating exchange rates,
respectively, for importers, exporters, monetary policy (central banks), and con-
sumers? Present your conclusions in tabular form.
Explain how xed and oating exchange rates, respectively, would aect a globally
operating company such as Mondi plc.
(d) Bonus problem. How credible are xed exchange-rate (currency board) and pegged
exchange rates? Research Bulgaria, Argentina in the 1990s, Hong Kong, and Denmark
and contrast their experience in light of the credibility of the chosen foreign-exchange
regime.
