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I need the answers to all the blank spaces please Maria Majid, Inc. is a specialty materials and metals company located in Detroit, Michigan. The

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I need the answers to all the blank spaces please

Maria Majid, Inc. is a specialty materials and metals company located in Detroit, Michigan. The company specializes in specific precious metals and materials which are used in a variety of pigment applications in many other industries including cosmetics, appliances, and a variety of high-tinsel metal fabricating equipment. Maria just purchased a shipment of phosphates from Morocco for 6,000,000, dirhams, payable in six months. Maria's cost of capital is 8.600%. Six-month call options on 6,000,000 dirhams at an exercise price of 10.00 dirhams per dollar are available from Bank Al-Magbrub at a premium of 2%. Six-month put options on 6,000,000 dirhams at an exercise price of 10.00 dirhams ner dollar are available at a nremium of 3%. Comnare and contrast alternative wavs that Maria might hedge its foreign Six-month forward rate, dirhams /$ 10.40 Cost of settlement in six months (US\$) $ Certain. 3. Money market hedge. Exchange dollars for dirhams now, and invest for six months. 4. Call option hedge. (Need to buy dirhams = call on dirhams) Option principal Current spot rate, dirhams /$ The premium cost of the option Option premium (principal/spot rate x%pm ) If the option is exercised, the dollar cost at a strike price of 10.00 dirhams /$ Plus, the premium is carried forward six months (pm x 1.07, WACC) Total net cost of call option hedge if exercised 6,000,000.00 10.00 $2.000% 12,000.00 $ 600,000.00 12,840.000 $ Maximum. The lowest cost certain alternative is the forward. If Maria were to expect the dirham to depreciate significantly over the next six months, she may choose the call option

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