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Question 5 (3 Marks) Ghani Glass Ltd has a market capitalization of 35.17 billion and debt outstanding of 2.47 billion. Ghani Glass plans to maintain
Question 5 (3 Marks) Ghani Glass Ltd has a market capitalization of 35.17 billion and debt outstanding of 2.47 billion. Ghani Glass plans to maintain this same debt to equity ratio in the future. The firm pays an interest rate of 4.63% on its debt and has a corporate tax rate of 25%. a. If Ghani Glass' free cash flow is expected to be $840 million next year and is expected to grow at a rate of 10% per year, what is Ghani Glass' WACC? b. What is the value of Ghani's interest tax shield? Question 6 (2+3 Marks) a. Does interest rate parity imply that interest rates are the same in all countries? b. Why might purchasing power party fail to hold
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