Dzenleme Ses Duyarllk Dzenley 3. Assume the Germany based Theis company has a balance sheet as follows. Cash AR Inventories Current assets Fixed assets 100000 A/P 150000 Accruals 250000 N/P 500000 Current liabilities 510000 Long term debt Total debt Common stock Retained earning Common equity 1100000 Total Liabilities & Owner's Equity 100000 150000 10000d 350000 25000d 60000g 310000 100000 41000g 1100000 Total assets The difference between the German investor investing only in German market stocks and the German investor investing in a global portfolio may be seen in the Table below. Domestic Portfolio for German Investor Ke= 2.1% K. = 10.5% (German market portfolio in Euros) BTheis = 0.91 (Theis versus German market portfolio Global Portfolio for German Investor Kf= 2.1% Km = 14.6% (Financial Times Global Index in Euros) BTheis = 0.61 (Theis versus Financial times global index) Assume tax rate is 40% and the before tax cost of debt is 11%. a Calculate the cost of equity and WACC for a domestic investor. (15 pts) b. Calculate the cost of equity and WACC for an international investor. (15 pts) c Interpret the difference. (5 pts)