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What should a borrower consider before issuing dual-currency bonds? What should an investor consider before investing in dual-currency bonds?
Degree of Operating Leverage 10 Times. Interest expense $720,000.00. Tax Rate 42%. What is the break even point in sales?
Explain the concept of the world beta of a security.
A firm with a WACC of 10% is considering the following mutually exclusive projects. Which project would you recommend? Explain.
Assume that interaffiliate cash flows are uncorrelated with one another. Calculate the standard deviation of the portfolio of cash held by the centralized depository for the following affiliate memb
What is the minimum level of capital according to Basel II the bank must maintain using the standardized approach for valuing credit risk? Be sure to show both the value of the risk-weighted assets
There are 183 days in the FRA period. Determine whether you should buy or sell the FRA and what your expected profit will be if your forecast is correct about the six-month LIBOR rate.
Why do most international bonds have high Moody's or Standard & Poor's credit ratings?
John bought his new pickup for no money down with with an amortized loan at 2.5%. For a term of 48 months, his monthly payment is 523.18$. How much will he still owe after 3 years?
What factors does Standard & Poor's analyze in determining the credit rating it assigns to a sovereign government?
Describe the differences between foreign bonds and Eurobonds. Also discuss why Eurobonds make up the lion's share of the international bond market.
Determine how much the FRA is worth and who pays who--the buyer pays the seller or the seller pays the buyer.
Determine the rate variance, time variance, and total direct labor variance. Discuss what might have caused these variances.
Explain the pricing-to-market phenomenon.
Explain how the premium and discount are determined when assets are priced-to-market. When would the law of one price prevail in international capital markets even if foreign equity ownership restr
Discuss how the cost of capital is determined in segmented vs. integrated capital markets.
Define and discuss indirect world systematic risk.
Suppose there exists a nontradable asset with a perfect positive correlation with a portfolio T of tradable assets. How will the nontradable asset be priced?
Explain why and how a firm's cost of capital may decrease when the firm's stock is cross-listed on foreign stock exchanges.
It pays an annual dividend of $10. If its current price is $70, what is the discount rate investors are using to value the stock?
In what sense do firms with nontradable assets get a free-ride from firms whose securities are internationally tradable?
In perfect markets, risk management expenditures aimed at reducing a firm's diversifiable risk serve to
MIRR Project X costs 1,00, and it's cash flows are the same in years 1 through 10. Its IRR is 12% and it's WACC is 10%. What is the projects MIRR?
What is the difference between the retail or client market and the wholesale or interbank market for foreign exchange?
How are foreign exchange transactions between international banks settled?