Tailor Johnson, a U.S. maker of fine menswear, has a subsidiary in Ethiopia. This year, the subsidiary reported and repatriated earnings before interest and taxes (EBIT) of 192192 million Ethiopian Birrs. The current exchange rate is 8.81368.8136 birrs/dollar or Upper Sequals $ 0.1135 divided by biuS-50.1135/birt The Ethiopian tax rate on this activity is 17 %17% U.S. tax law requires Tailor Johnson to pay taxes on the Ethiopian earnings at the same rate as on profits earned in the United States, which is currently 45 %45% However, the United States gives a full tax credit for foreign taxes paid up to the amount of the U.S. tax liability. What is Tailor Johnson's U.S. tax liability on its Ethiopian subsidiary? . com From 5 6 7 8 9 0 T Y U O DI You need to estimate the equity cost of capital for XYZ Corp. You have the following data avatable regarding past returns a. What was XYZ's average historical return? b. Compute the markets and XYZ's excess returns for each year. Estimate XYZ's beta c. Estimate XYZ's historical alpha. d. Suppose the current risk-free rate is 4%, and you expect the market's return to be 10%. Use the CAPM to estimate an expected return for XYZ Corp's stock e. Would you base your estimate of XYZ's equity cost of capital on your answer in part (a) or in part (d)? Data Table X a. What was XYZ's average historical return? XYZ's average historical retum was -22.5%. (Round to one decimal place.) b. Compute the markets and XYZ's excess returns for each year (Click on the icon located on the top right corner of the data table below in order to copy it's contents into a spreadsheer) The markets excess return for 2011 was 66% (Round to the nearest Integer) Risk free Return Market Return XYZ Return 8% 2011 42 The market's excess return for 2012 was % (Round to the nearest Integer) XYZ's excess return for 2011 was (Round to the nearest Integer) XYZ's excess return for 2012 was % (Round to the nearest Integer) Estimate XYZ's beta XYZ's betais (Round to two decimal places.) Print Done ype here to search You need to estimate the equity cost of capital for XYZ Corp. You have the following data available regarding past returns: Th a. What was XYZ's average historical return? b. Compute the markets and XYZ's excess returns for each year Estimate XYZ's beta c. Estimate XYZ's historical alpha d. Suppose the current risk-free rate is 4%, and you expect the market's return to be 10%. Use the CAPM to estimate an expected return for XYZ Corp's stock. e. Would you base your estimate of XYZ equity cost of capital on your answer in part (a) or in part (d)? a. What was XYZ's average historical return? Data Table XYZS average historical retum was -22.5% (Round to one decimal place) b. Compute the markets and XYZ S excess returns for each year The market's excess return for 2011 was 66% (Round to the nearest integer) (Click on the icon located on the top-right comer of the data table below in order to copy its contents into a spreadsheer) The markers excess return for 2012 was % (Round to the nearest integer) Risk-free Return Market Return XYZ Return XYZ's excess retum for 2011 was %. (Round to the nearest integer) XYZ's excess return for 2012 was % (Round to the nearest integer) Print Done Estimate XYZ s beta XYZ's beta is (Round to two decimal places) Type here to search o e a * S *
