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garri49 [273]
2 years ago
15

Pro Corp., a U.S.-based MNC, uses purchasing power parity to forecast the value of the Thai baht (THB), which has a current exch

ange rate of $o.o22. Inflation in the United States is expected to be scenario, Pro Corp. would forecast the value of the baht at the end of the year to be:
a. $0.023.
b. $0.021
c. $0.020.
d. None of the above
Business
1 answer:
aleksklad [387]2 years ago
4 0

Answer:

Option "B" is the correct answer to the following statement.

Explanation:

Given:

Exchange rate of 1 Baht= $0.022

Expected inflation in united states (Assume) = 3% = 0.03

Expected inflation in Thailand (Assume) = 10% = 0.10

Computation:

After 1 year  rate of 1 Baht in Dollar

The price in US = 1 × (1+0.03) = $1.03

The price in Thailand = 1 × (1+0.10) = 1.10 baht

1 baht = 1.03×0.022÷1.1 = $0.0206

Therefore, 1 baht = $0.21 (approx)

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The National Bureau of Economic Research is an independent, ______ organization not found within the government that observes an
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Explanation:

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On July 1, 2013, Farm Fresh Industries purchased a specialized delivery truck for $126,000. At the time, Farm Fresh estimated th
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Scenario 26-3. Assume the following information for an imaginary, open economy.
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Answer:

GDP equals $1455, answer is D

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6 0
2 years ago
Problem 14-13 Calculating the WACC [LO3] Dinklage Corp. has 4 million shares of common stock outstanding. The current share pric
sleet_krkn [62]

Answer:

WACC = 8.97%

Explanation:

total value of equity = $70 x 4,000,000 = $280,000,000

cost of equity:

$70 = $4.4935 / (Re - 4.5%)

Re - 4.5% = 6.42%

Re = 10.92%

total value of debt:

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YTM = {70 + [(1,000 - 950)/25]} / [(1,000 + 950)/2] = 72 / 975 = 7.3846%

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weighted cost of debt = ($71,250,000 / $135,450,000 x 7.3846%) + ($64,200,000 / $135,450,000 x 4.9517%) = 3.8845% + 2.347% = 6.2315%

total value of the firm = $280,000,000 + $135,450,000 = $415,450,000

equity weight = $280,000,000 / $415,450,000 = 0.674

debt weight = 1 - 0.674 =  0.326

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8 0
3 years ago
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