Question
1. when a multinational firm with its headquarters in the united states opens a facility in japan, it faces( ). this is caused by the
1. when a multinational firm with its headquarters in the united states opens a facility in japan, it faces( ). this is caused by the fluctuations in the exchange rate between the united states dollar and the japansese yuan.
A. international risk
B. exchange rate risk
C. diversifable risk
d. purchasing power risk
e political risk
2. Northstrom stores has 30,000 shares of common stock outstadning each selling today for $15 a share, the firm also has a bond issue outstanding with a total face value of 280,000 which is currently selling for 86 percent of face value. the cost of equity is 13 percent while the after-tax cost of debt is 6.9 percent. The firm has a tax rate of 30 percent. What is the weighted average cost of capitals?
a. 10.07 percent
b. 10.87 %
c. 12.36 %
d. 13.29 %
e. 13.47 %
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