Schweser book 2 page 219, concept checkers for reading 24: Integration of Financial Statement Analysis Techniques.
Questions 7 and 8.
The current exchange rate is used to calculate Small’s market cap owned by Big.
Why is the current exchange rate used?
Market Cap is the market value of a company’s outstanding shares. The common stock should be valued with historical rate under both temporal and current rate methods.
Anyone knows why? Thanks!