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Masteriza [31]
3 years ago
7

1. Assume that Walmart can borrow at yield of 5% in USD (5-year, zero coupon debt, issued in the US), before issuance costs. Alt

ernatively, they could issue the same debt denominated in EUR in the eurobond market at a yield of 5.25%. Unfortunately, issuance costs are 3% for EUR debt but only 2% for USD debt. Assume also that annualized risk-free, zero coupon rates for 5 years are 4% USD, 4.5% EUR. Assume covered interest parity holds. a. What are the all-in costs of the two debt issues, assuming Walmart hedges their exchange rate exposure in the forward market? (Note that the AIC of the EUR debt does not depend directly on the spot or forward exchange rates, but only on the ratio.) b. Ignoring issuance costs, at what EUR yield would the cost of EUR debt equal that of USD debt (i.e., 5%), again assuming Walmart hedges the exchange rate risk? c. What are the multiplicative credit spreads in the USD and EUR markets at these yields?
Business
1 answer:
Agata [3.3K]3 years ago
6 0

Answer:

it wold be cheap because walmart is cheap and by the way does walmart have toilet paper yet i havent gone so i dont know

Explanation:

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<span>9.20 percent

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1 year ago
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Reviewing the Budget
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Answer:

For each month we calculate the variance by finding the difference between the Actual numbers and Budget numbers.

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January  23,55,872   17,90,929      -5,64,943      Under Budget

February  26,54,031   28,27,606       1,73,575      Over Budget

March  22,39,980   29,24,180        6,84,200      Over Budget


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