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please show all steps EDISON PART 2: Financing Please decide how you will finance the following situations. You do not have to do research into
please show all steps
EDISON PART 2: Financing Please decide how you will finance the following situations. You do not have to do research into economic conditions or rates. You can make your own assumptions and base your answers on these assumptions 1. You want to build two plants in Brazil and one plant in China. Check the Edison case study for the costs of the plants. Assume you will have to raise all the money at once. You must raise 30% of the cash needed in equity and 70% in bonds. Consult the case study for the interest rates paid of the debt. Be sure to add the premium over government rates, as noted in the case study. In your answer, explain in which markets you intend to raise the equity and bonds, as well as the currency and the maturity. You can choose several markets, currencies and maturities if you think it is sensible. Remember your goal is to minimize disruption to your business from currency and financial risk 2. In Brazil, you also want to set up a finance company to help dealers finance their inventories. You have established relationship at a local bank. You expect to lend money to the dealers for three months. The dealers will pay you back from selling their inventory. As new car shipments arrive at the dealerships, you will continue to offer financing to the dealers. You plan to charge the dealers the current short-term interest rate at the time they request financing. The local bank is offering you a choice of either USD loans or Real denominated loans. They are also offering you either a floating rate loan or a fixed rate loan, as detailed in this table. If you take a floating rate, the rate is set for the term of the loan but will adjust for each loan. If you take a fixed rate option, you must agree to borrow at that rate for three years for each loan you offer the dealers USD Loans Floating Fixed Ubor+ So basis points (0.50%) 3% Real Loans Libor + 150 basis points (1.50%) 5% Explain which option you will choose and why? Consider the question of currency and fixed vs floating Step by Step Solution
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