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Foreign Investment Analysis Sevall Inc's Mexican Subsidiary, Cancunrocks, is expected to pay Sevall 1 Peso per share in 1 year after all foreign and US
| Foreign Investment Analysis | ||||
| Sevall Inc's Mexican Subsidiary, Cancunrocks, is expected to pay Sevall 1 Peso per share in 1 year after all foreign and US taxes have been accounted for. | ||||
| The exchange rate in 1 year is expected to be $0.10 dollars per peso. After this, the peso is expected to depreciate against the dollar by 2% forever due to | ||||
| inflation differences between the US and Mexico. | ||||
| The peso denominated dividend is expected to grow at 7% a year indefinitely. | ||||
| Sevall owns 10M shares of Cancunrocks. | ||||
| Assuming that the cost of equity is 12%, what is the valuation of Cancunrocks in US dollars? | ||||
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Small Brewery Finance
Authors: Maria Pearman
1st Edition
1938469526, 978-1938469527
