Answer:
WACC 0.1030590%
Explanation:
<u>First we use CAPM to solve the Cost of Equity</u>
risk free 0.034
market rate
premium market market rate - risk free 0.082
beta(non diversifiable risk) 1.37
Ke 0.14634
<u />
<u>Then we calculate the WACC</u>
Ke 0.14634
Equity weight 0.55
Kd 0.076
Debt Weight 0.45
t 0.34
WACC 0.1030590%
Answer:
His bank, if it is a large international bank.
Explanation:
Herrick needs to go to his bank that has international operations to get more stable rates for his international business.
International banks have corresponding banks they operate with for international transactions. A major advantage of this is that eachange rates between banks and their corresponding banks are more stable and not prone to huge fluctuations.
This will be the best option for Herrick.
Answer:
1) Export Competitiveness
2) Moral hazard means lack of incentive to guard against risk where one is protected from its consequences.
3) Government guarantees
Explanation:
1) The appreciation of the U.S. dollar and depreciation of the yuan worked as a catalyst to speed up the Asian currency crisis as the exports were slowed down causing a decline in growth which also gives the motivation to the central bank to devalue their currency more in order to achieve export competitiveness to boost up the exports and economy.
2) The moral hazard in this case was the government guarantees, both implicit and explicit.
3) The moral hazard of government guarantees motivates the investors to invest taking risky adventures since regulations were also lenient, and finance was available. We see over investments backed by the inflated land prices. After that it was the final nail in the coffin when the local investors dump their local currencies in order to buy foreign currencies whereas foreign loans were no longer competitive.
Answer:
Net operating cash flow $68,300
Explanation:
Operating cash flow is the amount of cash generated by a company from its main and normal business activity. This cash flow is useful to gauge the financial viability of a firm's business activity; the larger the better.
It is essentially computed as the net movement of cash inflow and outflow in respect of a business activities.
It is computed as follows:
$
Net income 49,000
Add deprecation 17,200
Less increase in receivable (11.200)
add increase in payables <u>13,300</u>
Net operating cash flow <u> 68,300</u>
Note that only items that relate to trading which is the core business area of the Pearl Corporation are considered. Depreciation is added because it is a non-cash item initially deducted from net income.
An increase in receivable means a reduction in cash while an increase in payables implies cash savings
Net operating cash flow $68,300
Answer:
10%; 16%
Explanation:
Given that,
Real GDP in the first quarter of 2016 = $10 billion
Real GDP in the first quarter of 2017 = $11 billion
Increased from the fourth quarter of 2016 to the first quarter of 2017 = 4%
Growth rate from the first quarter of 2016 to first quarter of 2017:
= 
= 
= 10%
Real GDP growth rate is as follows:
= 4% × 4
= 16%
