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9. (8 Points) United Herman Company (based in the U.S.) plans to divest either its Japanese or its Belgium subsidiary. Assume that if exchange rates
9. (8 Points) United Herman Company (based in the U.S.) plans to divest either its Japanese or its Belgium subsidiary. Assume that if exchange rates stayed constant, the dollar cash flows each of these subsidiaries will provide to the parent are somewhat similar. However, the firm expects the Yen to appreciate against the U.S. dollar, and the Euros to depreciate against the U.S. dollar in the future. The firm can sell either subsidiary for about the same price today. Which one should it sell and why
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