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2. Grenouille Properties. Grenouille Properties (U.S.) expects to receive cash dividends from a French joint venture over the coming three years. The first dividend, to

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2. Grenouille Properties. Grenouille Properties (U.S.) expects to receive cash dividends from a French joint venture over the coming three years. The first dividend, to be paid in one year, is expected to be 720,000. The dividend is then expected to grow 9.5% per year over the following two years. The current exchange rate is $1.37727 . Grenouille's weighted average cost of capital is 12.5% a. What is the present value of the expected dividend stream if the euro is expected to appreciate 4.10% per annum against the dollar? b. What is the present value of the expected dividend stream if the euro were to depreciate 2.90% per annum against the dollar? a. Assume that the euro is expected to appreciate 4.10% per annum against the dollar. Calculate the dividends in U.S. dollars for the next three years below: (Round to the nearest whole number for the dividends and round to four decimal places for the exchange rates.) Year 0 Year 1 Year 2 Year 3 Dividend stream expected from investment (6) 720,000 Current and expected spot rate ($/E) 1.3772 $ Dividends (5) The present value of the expected dividend stream if the euro is expected to appreciate 4.10% per annum against the dollar is $ (Round to the nearest dollar.) b. Assume that the euro is expected to depreciate 2.90% per annum against the dollar. Calculate the dividends in U.S. dollars for the next three years below: (Round to the nearest whole number for the dividends and round to four decimal places for the exchange rates.) Year o Year 1 Year 2 Year 3 Dividend stream expected from investment (6) 720.000 Current and expected spot rate ($/) 1.3772 $ Dividends ($) The present value of the expected dividend stream if the euro is expected to depreciate 2.90% per annum against the dollar is $ nearest dollar.) (Round to the

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