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Assume the U.S. interest rate is 7.5%, the New Zealand interest rate is 6.5%, the spot rate of the NZ$ is $.52, and the one year forward rate of the NZ$ is $.50. At the end of the year, the spot rate is $.48. Based on this information, what is the effective financing rate for a U.S. firm that takes out a one year, uncovered NZ$ loan? SHOW ALL WORK
A) about –1.7%.
B) about 0.0%.
C) about 14.7%.
D) about 15.4%.
E) about 8.3%.
A firm has debt of $90,000, equity of $140,000, a leveraged value of $100,000, a cost of debt of 6%, a cost of equity of 12%, and a tax rate of 40%. What is the firm's weighted average cost of capital?
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Kathy St Andrews is planning to buy a house for $140,000 by borrowing money at the rate of 9%. She expects to rent the house for 6 years, collecting $11,000 annual rent in advance each year. She thinks that she can sell the house for $180,000 after 6..
The paper should be formatted according to APA Requirements. Cite at least five peer-reviewed sources.
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