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Question 6 ( Mandatory ) ( 1 5 points ) TECHNOTHERM CORPORATION was founded in 1 9 7 2 by bringing together a skilled professional
Question Mandatory points TECHNOTHERM CORPORATION was founded in by bringing together a skilled professional team established in the field of waste heat recovery. Technotherm just executed a year contract with the State of Germany to deliver Firetube Boilers to a stateowned entity. Each Boiler Technotherm constructs can be built in Belgium or Tulsa, OK The cost of manufacturing is The terms of the contract specify that Technotherm must accept payment for the Boilers in Euro, which isn't a problem because Technotherm maintains a multicurrency account in London and it holds plenty of It will take Technotherm years to complete the construction and delivery of the Boilers. Technotherm's CFO looked up the conversion rates of for today and in years. The Spot rate is and the yr Forward is Also, the CFO checked the day and day LIBOR rates, which are and respectively. Three year SWAP rates are for day LIBOR and for day LIBOR. Technotherm must borrow finance the construction of the Boilers. The company has two financing options: USBANK: of the cost of manufacturing Interest only per annum, paid in monthly payments Rate Options: a DAY LIBOR b FIXED FOR YEARS DEUTCHE BANK: of the cost of manufacturing Interest only per annum, paid in quarterly payments Rate Options: a DAY LIBOR b FIXED FOR YEARS Assuming the cost of equity for Technotherm is : What is the cost of equity in USD at the end of the period?
Question Mandatory points
TECHNOTHERM CORPORATION was founded in by bringing together a skilled professional team
established in the field of waste heat recovery. Technotherm just executed a year contract with the State
of Germany to deliver Firetube Boilers to a stateowned entity. Each Boiler Technotherm constructs
can be built in Belgium or Tulsa, OK The cost of manufacturing is The terms of the contract
specify that Technotherm must accept payment for the Boilers in Euro, which isn't a problem because
Technotherm maintains a multicurrency account in London and it holds plenty of It will take
Technotherm years to complete the construction and delivery of the Boilers. Technotherm's CFO looked
up the conversion rates of for today and in years. The Spot rate is and the yr Forward
is Also, the CFO checked the day and day LIBOR rates, which are and
respectively. Three year SWAP rates are for day LIBOR and for day LIBOR.
Technotherm must borrow finance the construction of the Boilers. The company has two financing options:
USBANK:
of the cost of manufacturing
Interest only per annum, paid in monthly payments
Rate Options:
a DAY LIBOR
b FIXED FOR YEARS
DEUTCHE BANK:
of the cost of manufacturing
Interest only per annum, paid in quarterly payments
Rate Options:
a DAY LIBOR
b FIXED FOR YEARS
Assuming the cost of equity for Technotherm is : What is the cost of equity in USD at the end
of the period?
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