Sayang after-tax cost of euro-denominated debt

Assignment Help Business Management
Reference no: EM132725946

Assume the following information for Sayang Co., a Malaysia based MNC that needs funding for a project in Germany:

Msia risk-free rate = 3.5%

German risk-free rate = 4.5%

Ringgit denominated debt provided by Msia creditors = 6.5%

Euro-denominated debt provided by German creditors = 8%

Beta of project = 1.3

Expected Msia market return = 10%

Msia corporate tax rate = 30%

German corporate tax rate = 40%

Proportion of debt = 45%

Sayang Co. has decided to go for debt in Germany and equity in Msia

a) What is Sayang's after-tax cost of euro-denominated debt???

b) What is Sayang's cost of ringgit-denominated equity?

Reference no: EM132725946

Questions Cloud

How much is the target total liabilities : Lancelin Manufacturing has a target debt-to-equity ratio of .35. If the company's total equity is $2,500,000, how much is the target total liabilities
Employees to sign union authorization card : Suppose a coworker brought you a union leaflet and began urging you and other employees to sign a union authorization card.
Apple- implementation plan : Describe in some detail how the firm apple should go about implementing the strategic recommendation.
What is the present value of the expected returns : What is the present value of the expected returns if the euro were to depreciate 3.00% per annum against the ringgit?
Sayang after-tax cost of euro-denominated debt : Assume the following information for Sayang Co., a Malaysia based MNC that needs funding for a project in Germany:
Determine the number of days the company should run : Determine the number of days the company should run each refinery to minimize its costs and still refine enough oil to meet its orders using different methods
Return on investments with comparable risk : The dividend is expected to grow at a rate of 6 percent per year for the foreseeable future. If the return on investments with comparable risk is 10 percent
Outstanding us treasury and corporate bonds : Assume that all interest rates in the market increase suddenly and unexpectedly by 120 basis points.
Find the January balance in the Freeze Company subsidiary : The subsidiary ledger contains three accounts: Bixler Company, balance $3,500; Find the January balance in the Freeze Company subsidiary account

Reviews

Write a Review

Business Management Questions & Answers

  Discuss the role of the systems administrator

Using knowledge gained through the material covered in this course, discuss the role of the systems administrator in a corporate business setting.

  Complete a global competitive landscape

Complete a global competitive landscape and supply chain scan for your selected organization and industry. You are expected to apply the tools, concepts, and methodologies that you have learned during this course

  How many of each product will be produced

Include your interpretation of the results by stating: How many of each product will be produced? What is the profit for the optimal solution? What resource(s) is limiting the production?

  Compare and contrast direct finance and indirect finance

Compare and contrast direct finance and indirect finance. Which is more likely to have a larger share of the total financial market in a mature economy?

  Define centralized and decentralized decision-making

Describe and define centralized and decentralized decision-making. Provide advantages and disadvantages for both.

  How the team members performed collaboratively

How the team members performed collaboratively - Steps that were taken to ensure that team members focused on their tasks and listened to others and how suggestions were integrated from group members.

  Planning and managerial application

Planning and Managerial Application-why is Profit-cost-volume important in planning? Support your response with numerical example(s)

  What is the differences between synchronous and asynchronous

What is the differences between Synchronous and Asynchronous and which is more susceptible to Metastability?

  Define the utilization and efficiency

Define and discuss the utilization and efficiency.

  Important aspects for a manager in an organization

Discussion: One of the more important aspects for a manager in an organization is the reputation of the entity as we've read previously.

  What action an employer take after learning a person lied

What action an employer take after learning a person lied on their resume? Yolanda prepared a functional resume to deemphasize

  Increase production of beer

Suppose, as manager of Keynesian Brews, you wanted to increase your production of beer. How would you accomplish this in the short run

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd