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The Wolfpack Corporation is a U.S. exporter that invoices its exports to the United Kingdom 1. Bid/ask Spread. Compute the bid/ask percentage spread for Mexican peso retail transactions in which the ask rate is $.11 and the bid rate is $.10. 2. Forward Contract. The Wolfpack Corporation is a U.S. exporter that invoices its exports to the United Kingdom in British pounds. If it expects that the pound will appreciate against the dollar i ...

Other / Other 23 Apr 2016

How would a relatively high home inflation rate 1. Inflation Effect on Trade. a. How would a relatively high home inflation rate affect the home country’s current account, other things being equal? b. Is a negative current account harmful to a country? Discuss. 2. Currency Effects. When South Korea’s export growth stalled, some South Korean firms suggested that South Korea’s primary export problem was the we ...

Other / Other 23 Apr 2016

Explain how the joint venture can limit the risk 1. International Joint Venture. Anheuser-Busch, the producer of Budweiser and other beers, has recently expanded into Japan by engaging in a joint venture with Kirin Brewery, the largest brewery in Japan. The joint venture enables Anheuser-Busch to have its beer distributed through Kirin’s distribution channels in Japan. In addition, it can utilize Kirin’s facilities to produc ...

Other / Other 23 Apr 2016

Explain why a stronger dollar could enlarge the U.S. balance 1. Exchange Rate Effects on Trade. a. Explain why a stronger dollar could enlarge the U.S. balance of trade deficit. Explain why a weaker dollar could affect the U.S. balance of trade deficit. 2. Exchange Rate Effects on Borrowing. Explain how the appreciation of the Japanese yen against the U.S. dollar would affect the return to a U.S. firm that borrowed Japanese yen an ...

Other / Other 23 Apr 2016

Explain how syndicated loans are used in international markets 1. Indirect Exchange Rate. If the direct exchange rate of the euro is worth $1.25, what is the indirect rate of the euro? That is, what is the value of a dollar in euros? 2. Syndicated Loans. Explain how syndicated loans are used in international markets. Business Management Assignment Help, Business Management Homework help, Business Management Study Help, Business ...

Other / Other 23 Apr 2016

Explain the expected effects of these actions on the consolidated capital structure 1. WACC. An MNC has total assets of $100 million and debt of $20 million. The firm’s before-tax cost of debt is 12 percent, and its cost of financing with equity is 15 percent. The MNC has a corporate tax rate of 40 percent. What is this firm’s weighted average cost of capital? 2. Financing Decision. Forest Company produces goods in the U.S. ...

Other / Other 23 Apr 2016

What is an advantage of using equity to support the subsidiary Multinational Capital Structure Decision at the Sports Exports Company 1. What is an advantage of using equity to support the subsidiary? What is a disadvantage? 2. If Jim decided to use long-term debt as its primary form of capital to support this subsidiary, should he use dollar-denominated debt or pound-denominated debt? 3. How can the equity proportion of this firmâ€℠...

Other / Other 23 Apr 2016

Maple Furniture recently issued new common stock 1) During the latest year Ruth Corp. had sales of $300,000 and a net income of $20,000, and its year-end assets were $200,000. The firm's total debt to total assets ratio was 40%. Based on the Du Pont equation, what was the firm's ROE? A. 15.33% B. 15.67% C. 16.00% D. 16.33% E. 16.67% 2) Considered alone, which of the following would increase a company's current ratio? A. An incre ...

Other / Other 23 Apr 2016

Nebraska Co. plans to pursue a project in Argentina 1. Financing with Foreign Equity. Orlando Co. has its U.S. business funded with dollars with a capital structure of 60% debt and 40% equity. It has its Thailand business funded with Thai baht with a capital structure of 50% debt and 50% equity. The corporate tax rate on U.S. earnings and on Thailand earnings is 30%. The annualized 10-year risk-free interest rate is 6% in the U.S. and 2 ...

Other / Other 23 Apr 2016

Carazona Inc. is a U.S. firm that has a large subsidiary 1. Cost of Foreign Debt Versus Equity. Carazona Inc. is a U.S. firm that has a large subsidiary in Indonesia. It wants to finance the subsidiary’s operations in Indonesia. However, the cost of debt is presently about 30 percent there for firms like Carazona or government agencies that have a very strong credit rating. A consultant suggests to Carazona that it should use equ ...

Other / Other 23 Apr 2016