9. Stevenson-Kwo's WACC. Calculate the weighted average cost of capital for Stevenson-Kwo for before and after international
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9. Stevenson-Kwo's WACC. Calculate the weighted average cost of capital for Stevenson-Kwo for before and after international diversification.
a. Did the reduction in debt costs reduce the firm's weighted average cost of capital? How would you describe the impact of international diversification on its costs of capital?
b. Adding the hypothetical risk premium to the cost of equity introduced in question 8 (an added 3.0% to the cost of equity because of international diversification), what is the firm's WACC?
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Related Book For 
Fundamentals Of Multinational Finance
ISBN: 9780321541642
3rd Edition
Authors: Michael H. Moffett, Arthur I. Stonehill, David K. Eiteman
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