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Case
| HBS Case Collection
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1996
Telmex PRIDES
by
Kenneth A. Froot and Mark Seasholes
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Abstract
The case examines an issue by a Mexican development bank of PRIDES written on Telmex stock. PRIDES are a dividend-enhanced security which are exchangeable into shares of the underlying stock. The focus is on pricing these instruments, which involve large peso-denominated payments at maturities beyond that of the Mexican yield curve. Further, the optionality of the PRIDES is interesting to analyze.
Keywords: financial derivatives;
securities;
International Finance;
Banks and Banking;
Financial Instruments;
Valuation;
Mexico;
Citation:
Froot, Kenneth A., and Mark Seasholes. "Telmex PRIDES." Harvard Business School Case 296-009, March 1996.