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Talishan Shoe Company (B). Talishan Shoe Compary of Durham. North Carolina, has received an order for 50,500 cartons of athletic shoes from Southampton Footware, Lid, of England, payment to be in British pounds sterling. The shoes will be shipped to Southamplon Footware under the terms of a letter of credit issued by a London bank on behalf of Southampton Footware. The letter of credit specifies that the face value of the shipment, E393,000, will be paid 120 days after the London bank accepts a draft drawn by Southampton Footware in aocordance with the terms of the letter of credit. The current discount rate in London on 120 -day bankers' aoceptances is 11.6% per annum, and Southamplon Footware estimates its weighted average cost of capital to be 17.8% per annum. The commission for selling a bankers' acceptance in the discount market is 2.1% of the face amount. a. Would Talishan Shoe Company gain by holding the acceptance to maturity as compared to discounting the bankers' acceptance at once? b. Does Talishan Shoe Company incur any other risks in this transaction? c. Assume that Great Britain charges an import duty of 9.6% on shoes importod into the United Kingdom. Talistan Shoe Company discovers that it can manufacture shoes in Ireland and import thom into Britain free of any import duty. What factors should Talishan consider in dechding to continue to export shoes from North Carolina versus manufacture them in lreland? (NOTE: Assume a 360-day year.) a. Would Talishan Shoe Company gain by holding the acceptance to maturity, as compared to discounting the bankers' acceptance at once? Altemative 1: If Southampton Footware holds the draft for 120 days after the bank has accepted it, Talishan Shoe will feceived the face amount of i393, coo. The present value of f393,000 received 120 days hence, discounted at Talishan Shoe's WACC is I (Round to wo decimal places.)