As of 31 December 2015, SalMarine Sea Farm, ASA, recorded sales revenues totaling NOK 300 billion. Of the total, 75% wer earned in Central-Europe (in euros) at an end-of-year exchange rate of NOK 8.00/EUR. Assume for simplicity that a^ll euro-revenues were received at the very end of the yea^r. Operating costs in 20%, totaling NOK 180 billion, accounted for 60% of total sales revenues. 50% of the costs were NOK-denominated, the other half in euros. For convenience, assume also that all costs were paid at the end of the year. As of 31 December 2015, SalMarine was debt-financed to the tune of NOK 500 billion; 75% denominated in euros, the rest in NOK. Irrespective of denomination, the firm paid interest at a fixed rate of \Vo on the debt. Assume that the firm’s overall (weighted average) cost of capital was 12% at the end of the year, and that sha¡eholders were well diversified with respect to operating as well as exchange rate risk.
On 02 Januar¡ 2016, assume that the NOK unexpectedly depreciated 10% versus the EUR and that, as a result, sales revenues in euros were expected to increase by 10% over last years level. NOK-denominated revenues were not expected to change from the 2015-level
How was the value of the SalMarine Sea Farm Corporation, ASA, affected by the NOK-depreciation on 02 January,2016?
Can someone please help me with this?