4. (a) Orlando Co. has its U.S business funded with dollars with a capital structure of 60 percent debt and 40 percent equity. It has its Thailand business funded with the Thai Baht with a capital structure of 50 percent debt and 50 percent equity. The annualized 10-year risk-free interest rate is 6 percent in the United States and 21 percent in Thailand. Its business in the United States has a beta of 0.8 relative to the U.S. market, while its business in Thailand has beta 1.1 relative to the Thailand market. Orlando also has gathered the other financial details as follows: Assumptions Thailand (%) 9 United States (%) 12 Cost of debt, before tax Corporate income tax Share market return 30 10 30 15 Based on the information above, compute the Weighted Average Cost of Capital (WACC) for both domestic and international companies. (b) The cost of capital for the U.S. based multi-national companies (MNC) with a large subsidiary in Brazil is higher than for U.S. based MNC in the same industry with a large subsidiary in Japan. Explain FIVE (5) characteristics cost of capital for MNC may differ from domestic firms. 4. (a) Orlando Co. has its U.S business funded with dollars with a capital structure of 60 percent debt and 40 percent equity. It has its Thailand business funded with the Thai Baht with a capital structure of 50 percent debt and 50 percent equity. The annualized 10-year risk-free interest rate is 6 percent in the United States and 21 percent in Thailand. Its business in the United States has a beta of 0.8 relative to the U.S. market, while its business in Thailand has beta 1.1 relative to the Thailand market. Orlando also has gathered the other financial details as follows: Assumptions Thailand (%) 9 United States (%) 12 Cost of debt, before tax Corporate income tax Share market return 30 10 30 15 Based on the information above, compute the Weighted Average Cost of Capital (WACC) for both domestic and international companies. (b) The cost of capital for the U.S. based multi-national companies (MNC) with a large subsidiary in Brazil is higher than for U.S. based MNC in the same industry with a large subsidiary in Japan. Explain FIVE (5) characteristics cost of capital for MNC may differ from domestic firms