FX RISK HEDGING AT EADS

By:

14P027 Mithun Chandra Mohan

14P031 Pallavi Jha

14P056 Udit Upreti

14P058 Vishal Garg

Introduction

EADS: Leading global aerospace & defense company with Airbus being its primary revenue source

Why hedging: Billed customers in dollars ; significant costs

(76% of sourcing) in Euros Depreciation of dollar against Euro

Hedged future revenues with FX forward contracts

Issue: Should EADS employ FX options to hedge?