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1. Country Risk and Value of Insurance. Saltex, a US based firm, is considering a project in Israel. Its exit policy depends on selling its

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1. Country Risk and Value of Insurance. Saltex, a US based firm, is considering a project in Israel. Its exit policy depends on selling its assets to a local firm for Israel Shekel (ILS) 50 million in 6 years. The firm analyzes the political situation in Israel and assesses a 20% probability of not realizing this value because of expropriation or war. The Shekel trades for USD 0.25 currently and is not expected to change in value over the next 6 years. If the firm's USD based WACC is 13%, estimate the value of insurance coverage for country risk

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