1. You expect the price of MU Corporation stock to be $45 in 5 years. You also expect dividends to increase at an annual rate of 10 percent from the most recent dividend of $1.00. If your required rate of return is 15 percent, how much are you willing to pay for Mu Corp's stock?

2. Back in 2019, First Food Distribution Sdn Bhd, a Malaysian company, had an inventory in Singapore worth SGD1.5 million. The exchange rate of SGD/MYR at the time was 1 Malaysian Ringgit for 0.3023 Singaporean dollars. The inventory is still in Singapore and is worth the same amount in Singaporean dollars. Today the exchange rate is 1 Malaysian Ringgit for 0.3275 Singaporean dollars. What is First Food Distribution's inventory gain or loss in home currency due to FX fluctuations?

3. Identify and briefly discuss three consequences of exchange rate risks.

Answer rating: 100% (QA)

The Answer is in the image, click to view ... View the full answer