Q No.1Amresh is interested in estimating the company’s WACC and has collected the following information:The company has bonds outstanding that mature in 20 years with an annual coupon of 7.5 percent. The bonds have a face value of $1,000 and sell in the market today for $950.The risk-free rate is 7 percent.The market risk premium is 6 percent.The stock’s beta is 1.2.The company’s tax rate is 40 percent.The company’s target capital structure consists of 60 percent equity and 40 percent debt.The company uses the CAPM to estimate the cost of equity and does not include flotation costs as part of its cost of capital. What is Amresh WACC?
Question 3
Hedging using futures
Suppose a farmer is expecting that her crop of oranges will be ready for
harvest and sale as 150,000150,000 pounds of orange juice in 33
months time. Suppose each orange juice futures contract is for 15,00015,000
pounds of orange juice and the current futures price is F_0 = 118.65F0?=118.65 cents-per-pound.
Assuming that the farmer has enough cash liquidity to fund
any margin calls, what is the risk-free price that she can guarantee herself.
Agee Technology, Inc., issued 9% bonds, dated January 1, with a Its amount of $800 million on July1, 2021, at a price of $780 million. For bonds of sirnilar risk and maturity, the market yield is 10%. Interest is paid semi-annually on June 30 and December 31.
Required: What would be the amount(s) related to the bonds that Agee would report in its statement of cash flows for the year ended December 31, 2021, if it uses the indirect method?
Assignment 1 –Individual Assignment a)Draw a diagrammatic representation of continuously compounded returns of the AUD/USDpairing (a distribution of the returns graphically), you may nominate the interval with a minimuminterval of two years’ worthof data (daily, weekly or monthly data may be used) . What are thedistributional features that you observe? b)Based on your understanding of a normal distribution discuss whether the distribution conformsto the features of a normal distribution in terms of kurtosis, skewness and tails. c)Discuss the volatility of the currency pairing and the currency pairing’s trends over the nominated interval. d)What is your assessment of the likely directional movement of S(AUD/USD) over the next weekbased on a valid statistical method (moving averages, trend analysis et al). Does this coincide withyour intuition? e)Compare the volatility characteristics and return distribution of the currency pairing with Bitcoinover the relevant interval. Given what you have observed comment on whether bitcoin evidencesthe characteristics of a legitimate currency. f)Measure the association (correlation) evident between the AUD and the value of dry bulk commodities.Given what you have observed and using relevant third party research, comment on the assertionthat the AUD is a commodity currency
In some countries the exchange rate is regulated by the state, in other countries the exchange rate is freely set according to market conditions, supply and demand.
I believe that an exchange rate should not be set for migrants, since this serves as an indicator of competitiveness from one country to another in that way the internal prices of national production are related to international ones.
Usually the sending of remittances come from people who are abroad in developed countries sending remittances to their families or people, who are in less developed countries. I consider that remittances are important for the economy of the receiving country, impacting on the growth of consumption, because remittances end up being used for family support expenses. An example is Colombia, an underdeveloped country, the income of remittances represented an increase of 2% of GDP in 2019.
Simple write a comment for this with 50 words minimum (APA format)
The United States is a country with a very strong economy that undoubtedly attracts the attention and interest of many other countries in the world for business or investment. Therefore, it is really necessary for the government to control the purchase and sale of its currency, which is controlled by and by the exchange rate. When an economy is more controlled it is reflected in the stable economy.
With currency exchanges you see a lot of fraud and although a country tries to have the greatest possible control many times it becomes impossible due to corruption. On the other hand, there are many factors that would be affected if the interest rate were not controlled by the government, such as the following which Alexandra Twin mentions in her article “Factors that influence exchange rates”:
Interest Rates
When the interest rate increases, banks make use of inflation and exchange rates. When the exchange rate increases, it creates a higher-yielding economy and attracts foreign capital.
Strong Economic Performance
Financial investment can grow, because investors will focus on a stable economy where the government is in control
Terms of Trade
When there is greater exports, it is because the terms of trade have improved positively, which entails a greater demand for the country’s currency, if it increases at a higher rate than that of imports.
Current Account Deficits
This happens when a country spends more in foreign trade and a deficit is created because it does not earn what it is investing in other countries and must borrow to cover this deficit.
These are some of the factors that would be affected if the government did not control the rate, however there are many others that would cause economic destabilization.
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Stock Investing
- For your first main post, discuss the fundamental approach of stock investing created by Ben Graham. Be sure and quote specific guidelines from one of the many articles out there from credible sources on how this works. You’ll be applying it in the next post. Cite and reference carefully. If you find a good resource on the Graham approach, please share! Note: The first item that comes up in Search is often a very old article from AAII by Maria Scott. You may not use that article. Use the library databases. Click on the library link in the navigation ribbon to get help. Put your name and the title of your source article in the post title, please.
- For your second main post, discuss how this approach might be applied to the company you are studying “Hawaii”, from a value investor perspective. Do the analysis! Be sure and give evidence and use APA format for citing and referencing. Put your name and Graham Analysis of “company symbol” in the post title.
- Make at least two substantive peer replies.
Intro International Business
Final Project Assignment
Group Project: Market Entry Strategy
This project is specially designed to illustrate three themes that have become hallmarks of the textbook: (1) globalization, (2) markets and technology, and (3) culture.
This project requires students to research a nation as a future market for a new product or service to enter the designated country. Working in group students will research and analyze a country, then recommend a course of action for market entry strategy according to the framework of the textbook and the current world situation.
Your project will be present a Market Entry Strategy Project to Multinational Enterprise stakeholders to decide to invest in the project.
Your project delivery will include at minimum the following:
Country Analysis
- Overview on the country including its people, economy, infrastructure, and political government
Business Environment Analysis
- What are the cultural environments?
- How can the cultural environments affect or the impact business opportunities?
Opportunities for Market Entry
- What are the trade factors of the country?
- What are the trade patterns?
- identifies several import and export opportunities
- What is the political government approach to trade?
The appropriate strategies to enter the market of choice
Note:
Each group presents one paper submission. The writing must be in APA format with the name of the students.
Assignment 1 –Individual Assignment a)Draw a diagrammatic representation of continuously compounded returns of the AUD/USDpairing (a distribution of the returns graphically), you may nominate the interval with a minimuminterval of two years’ worthof data (daily, weekly or monthly data may be used) . What are thedistributional features that you observe? b)Based on your understanding of a normal distribution discuss whether the distribution conformsto the features of a normal distribution in terms of kurtosis, skewness and tails. c)Discuss the volatility of the currency pairing and the currency pairing’s trends over the nominated interval. d)What is your assessment of the likely directional movement of S(AUD/USD) over the next weekbased on a valid statistical method (moving averages, trend analysis et al). Does this coincide withyour intuition? e)Compare the volatility characteristics and return distribution of the currency pairing with Bitcoinover the relevant interval. Given what you have observed comment on whether bitcoin evidencesthe characteristics of a legitimate currency. f)Measure the association (correlation) evident between the AUD and the value of dry bulk commodities.Given what you have observed and using relevant third party research, comment on the assertionthat the AUD is a commodity currency
In some countries the exchange rate is regulated by the state, in other countries the exchange rate is freely set according to market conditions, supply and demand.
I believe that an exchange rate should not be set for migrants, since this serves as an indicator of competitiveness from one country to another in that way the internal prices of national production are related to international ones.
Usually the sending of remittances come from people who are abroad in developed countries sending remittances to their families or people, who are in less developed countries. I consider that remittances are important for the economy of the receiving country, impacting on the growth of consumption, because remittances end up being used for family support expenses. An example is Colombia, an underdeveloped country, the income of remittances represented an increase of 2% of GDP in 2019.
Simple write a comment for this with 50 words minimum (APA format)