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Assume the following information for Pexi Co., a U.S.-based MNC that needs funding for a project in Germany: U.S. risk-free rate = 4% Risk premium
Assume the following information for Pexi Co., a U.S.-based MNC that needs funding for a project in Germany: U.S. risk-free rate = 4% Risk premium on debt provided by U.S. creditors = 3% Beta of project = 1.2 Expected U.S. market return = 10% U.S. corporate tax rate = 30% 1) What is Pexi's cost of equity? 2) What is Pexi's cost of capital (WACC)?
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