Questions :

a.What is the value of Alpha NV? (10 points)

b.What is the value of Beta NV? (10 points)

c.What is the market value of Beta NV's equity ?

d. (10 points) How much will it cost to purchase 20 percent of each firm's equity? (10 points)

e. Assuming each firm meets its earnings estimates, what will be the euro return to each position in part (d) over the next year? (20 points)

f. Construct an investment strategy in which an investor purchases 20 percent of Alpha's equity and replicates both the cost and dollar return of purchasing 20 percent of Beta's equity. (20 points)

g. Is Alpha's equity more or less risky than Beta's equity? Explain. (20 points)