Question
Answer fully and completely. Thank you! QUESTION 77 For the next 6 questions suppose the following data holds: H&D is a U.S. multinational company with
Answer fully and completely. Thank you!
QUESTION 77
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For the next 6 questions suppose the following data holds:
H&D is a U.S. multinational company with the following debt and equity components in its consolidated capital section. The company's cost of equity is 18%.
10 year 6% Euro Bonds (euros) selling at par 8,000,000 Spot Rate ($/euro) $1.1/euro 20 year 8% Pound Bonds (pounds) selling at par 4,000,000 Spot Rate ($/) $1.5/ Common Stock $30,000,000 Tax Rate 30.00% Retained Earnings $5,000,000 What is the current value of the 10-year euro bonds in U.S. dollars?
$8,800,000
$7,272,727
$9,600,000
$14,000,000
QUESTION 78
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Continuation of the previous problem:
H&D is a U.S. multinational company with the following debt and equity components in its consolidated capital section. The company's cost of equity is 18%.
10 year 6% Euro Bonds (euros) selling at par 8,000,000 Spot Rate ($/euro) $1.1/euro 20 year 8% Pound Bonds (pounds) selling at par 4,000,000 Spot Rate ($/) $1.5/ Common Stock $30,000,000 Tax Rate 30.00% Retained Earnings $5,000,000 What is the current value of the 20-year pound bonds in U.S. dollars?
$4,000,000
$2,666,667
$6,000,000
$7,000,000
QUESTION 79
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Continuation of the previous problem:
H&D is a U.S. multinational company with the following debt and equity components in its consolidated capital section. The company's cost of equity is 18%.
10 year 6% Euro Bonds (euros) selling at par 8,000,000 Spot Rate ($/euro) $1.1/euro 20 year 8% Pound Bonds (pounds) selling at par 4,000,000 Spot Rate ($/) $1.5/ Common Stock $30,000,000 Tax Rate 30.00% Retained Earnings $5,000,000 What is the weight of debt financing?
26.50%
68.63%
29.72%
73.50%
QUESTION 80
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Continuation of the previous problem:
H&D is a U.S. multinational company with the following debt and equity components in its consolidated capital section. The company's cost of equity is 18%.
10 year 6% Euro Bonds (euros) selling at par 8,000,000 Spot Rate ($/euro) $1.1/euro 20 year 8% Pound Bonds (pounds) selling at par 4,000,000 Spot Rate ($/) $1.5/ Common Stock $30,000,000 Tax Rate 30.00% Retained Earnings $5,000,000 What is the weight of equity financing?
73.50%
31.37%
70.28%
26.50%
QUESTION 81
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Continuation of the previous problem:
H&D is a U.S. multinational company with the following debt and equity components in its consolidated capital section. The company's cost of equity is 18%.
10 year 6% Euro Bonds (euros) selling at par 8,000,000 Spot Rate ($/euro) $1.1/euro 20 year 8% Pound Bonds (pounds) selling at par 4,000,000 Spot Rate ($/) $1.5/ Common Stock $30,000,000 Tax Rate 30.00% Retained Earnings $5,000,000 What is the WACC for the H&D Company?
10.67%
14.07%
13.85%
15.78%
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