Why should the discount rate not be adjusted for political

Assignment Help Financial Management
Reference no: EM131116349

Why should the discount rate not be adjusted for political risk?

Reference no: EM131116349

Questions Cloud

Selig company purchased for cash : Equity Investment on July 1, 2010, Selig Company purchased for cash 40% of the outstanding capital stock of Spoor Corporation. Both Selig and Spoor have a December 31 year-end.
Do country risk ratings have information on this particular : Suppose a multinational corporation is particularly worried about ethnic warfare in a few countries in which it is considering investing. Do country risk ratings have information on this particular risk?
How can we use current quantitative information to predict : How can we use current quantitative information to predict future political events, such as expropriation?
What are some examples of organizations that provide country : What are some examples of organizations that provide country risk ratings?
Why should the discount rate not be adjusted for political : Why should the discount rate not be adjusted for political risk?
Investment accounted for under the equity method on july : Investment Accounted for under the Equity Method on July 1, 2011, Fontaine Company purchased for cash 40% of the outstanding capital stock of Knoblett Company.
What were the main characteristics of the brady plan : What were the main characteristics of the Brady Plan?
Why was a program of debt buybacks not sufficient to resolve : What is a debt buyback? Why was a program of debt buybacks not sufficient to resolve the Debt Crisis?
Why does a company maintain an investment portfolio : What factors should be considered in determining whether investments in securities should be classified as held-to-maturity, available-for-sale, and trading? How do these factors affect the accounting treatment for unrealized losses?

Reviews

Write a Review

Financial Management Questions & Answers

  Equity cost of capital for the company that released shares

A stock is expected to pay $0.80 per share every year indefinitely. If the current price of the stock is $18.90, and the equity cost of capital for the company that released the shares is 6.4%, what price would an investor be expected to pay per shar..

  Discuss the policy reasons for a statute of limitations

Discuss the policy reasons for a statute of limitations for tax returns.

  What is effective annual rate on this loan-monthly payment

You want to buy a new sports coupe for $80,500, and the finance office at the dealership has quoted you an APR of 6.2 percent for a 48 month loan to buy the car. What will your monthly payments be? What is the effective annual rate on this loan?

  Calculate dollar weighted return using financial calculator

A pension fund that begins with $500,000 earns 15% the first year and 10% the second year. At the beginning of the second year, the sponsor contributes another $300,000. Calculate the IRR (dollar weighted return) using a financial calculator and show..

  With the first cash flow received three years

What is the present value of an annuity of $6,100 per year, with the first cash flow received three years from today and the last one received 25 years from today? Use a discount rate of 6 percent.

  What is this bond’s time to maturity

A bond issued by IBM on December 1, 1996, is scheduled to mature on December 1, 2096. If today is December 2, 2021, what is this bond’s time to maturity? (Use 365 days a year.)

  Discuss capital rationing and soft rationing

Discuss capital rationing and soft rationing and what are some of the important points to remember while estimating the cash flows of a project?

  Mortgages of that maturity carry a fixed interest rate

A prospective homeowner wants to determine how much she can borrow in the form of a fixed-rate 20-year mortgage. Mortgages of that maturity carry a fixed interest rate of 9.00%. How large a mortgage can she afford, assuming she makes steady payments ..

  Calculate the gain or loss on sale

Delta Airlines purchases a plane for $4 million, no salvage value, useful life 10 years. Using straight-line depreciation, they depreciate it 5 full years. They then sell it for $3 million. Calculate the gain or loss on sale. $_______________________..

  What is the before-and after- tax cost of debt

WACC. The Randall Corporation, s US based firm, has 400 million shares outstanding. These shares trade on the NYSE, and their most recent market price was USD 21.65. Analysts report that the beta of Randall/s equity relative to the world index is 1.3..

  New manufacturing plant and equipment to actually produce

Consider a project to supply 109 million postage stamps per year to the U.S. Postal Service for the next five years. You have an idle parcel of land available that cost $1,990,000 five years ago; if the land were sold today, it would net you $2,190,0..

  What is the portfolio beta

You own a stock portfolio invested 24 percent in Stock Q, 21 percent in Stock R, 44 percent in Stock S, and 11 percent in Stock T. The betas for these four stocks are .86, .92, 1.32, and 1.77, respectively. What is the portfolio beta?

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