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Orlando Co . has its U . S . business funded in dollars with a capital structure of 7 0 percent debt and 3 0
Orlando Co has its US business funded in dollars with a capital structure of percent debt and percent equity. It has its Thailand business funded in Thai baht with a capital structure of percent debt and percent equity. The corporate tax rate on US earnings and on Thailand earnings is percent. The annualized year riskfree interest rate is percent in the United States and percent in Thailand. The annual real rate of interest is about percent in the United States and percent in Thailand. Interest rate parity exists. Orlando pays percentage points above the riskfree rates when it borrows, so its beforetax cost of debt is percent in the United States and percent in Thailand. Orlando expects that the US stock market return will be percent per year, and expects that the Thailand stock market return will be percent per year. Its business in the United States has a beta of relative to the US market, while its business in Thailand has a beta of relative to the Thai market. The equity used to support Orlando's Thai business was created from retained earnings by the Thailand subsidiary in previous years. However, Orlando Co is considering a stock offering in Thailand that is denominated in Thai baht and targeted at Thai investors. Estimate Orlando's cost of equity in Thailand that would result from issuing stock in Thailand. Do not round intermediate calculations. Round your answer to one decimal place.
Orlando Co has its US business funded in dollars with a capital structure of percent debt and percent equity. It has its Thailand business funded in
Thai baht with a capital structure of percent debt and percent equity. The corporate tax rate on US earnings and on Thailand earnings is percent.
The annualized year riskfree interest rate is percent in the United States and percent in Thailand. The annual real rate of interest is about percent
in the United States and percent in Thailand. Interest rate parity exists. Orlando pays percentage points above the riskfree rates when it borrows, so its
beforetax cost of debt is percent in the United States and percent in Thailand. Orlando expects that the US stock market return will be percent per
year, and expects that the Thailand stock market return will be percent per year. Its business in the United States has a beta of relative to the US
market, while its business in Thailand has a beta of relative to the Thai market. The equity used to support Orlando's Thai business was created from
retained earnings by the Thailand subsidiary in previous years. However, Orlando Co is considering a stock offering in Thailand that is denominated in Thai
baht and targeted at Thai investors. Estimate Orlando's cost of equity in Thailand that would result from issuing stock in Thailand. Do not round intermediate
calculations. Round your answer to one decimal place.
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