1. Explain the difference between performing the capital budgeting analysis from the parent firm’s perspective as opposed to the subsidiary project's perspective.
2. Explain measures and techniques used to manage international portfolio investments. Then, contrast determinants of MNC direct foreign investments in advanced countries versus emerging nations.
3. Ellie's Boutique has a bond issue outstanding that matures in fourteen years. The bonds pay interest semi-annually. Currently, the bonds are quoted at 98 percent of face value and carry an 8 percent coupon. The firm's tax rate is 35 percent. What is the firm's aftertax cost of debt?
2.88 percent
5.36 percent
5.45 percent
8.24 percent
10.72 percent