Please provide solutions. Thanks! 10. The table below presents the correlation coefficient between the...
80.2K
Verified Solution
Link Copied!
Question
Finance
Please provide solutions. Thanks!
10. The table below presents the correlation coefficient between the returns of Company A's stock, its local stock market and the world portifolio. What is company A's cost of capital if markets are segmented? The risk free rate is 2.25%. Company A Local Market World Correlation Coefficients (p) Company A Local Market World SD(%) R(%) 1.00 0.89 0.69 18.39 ? 1.00 0.72 14.34 8.64 1.00 11.19 6.74 (a) 7.32% (b) 9.53% (c) 41.93% (d) 29.95% (e) None of the above 11. You are analyzing a potential 3-year investment in the UK. It will require an initial investment of 70,000.00 and is forecasted to yield cashflows of 70,000.00 for the next 3 years. As of today, the spot exchange rate is $1.2143 and the rates of inflation expected to prevail for the next year in the US is 5 % and in 2 % in the UK. Your estimated cost of capital in dollars is 7.52%. What is the NPV in dollars? (a) $148,891.83 (b) $163,892.83 (c) $122,615.36 (d) $166,392.23 (e) None of the above
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Please provide solutions. Thanks!