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Finance staff estimates cost of equity

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Sunrise Manufacturing, Inc, a U.S. multinational company, has the following debt components in its consolidated capital section. Sunrise's finance staff estimates their cost of equity to be 17.7%. Current exchange rates are also listed below.

Assumption

Value

Tax rate

30.00%

Market Capitalization

$50,116,668

25 year USD bonds

$9,356,938

5 year Eurobonds in Pound Sterling

£4,976,980

10-year euro bonds (Euros)

€ 608,988

20-year yen bonds (yen)

¥ 918,109,445

Spot rate ($/euro)

1.351

Spot rate ($/pound)

1.749

Spot rate (yen/$)

107.6

Pre-tax

Cost (%)

 

USD Bonds 6.000%

Pound Sterling Eurobonds 4.000%

Euro Bonds (euros) 5.000%

Yen Bonds 2.000%

Reference no: EM133118219

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