Maurice Tutor

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About Maurice Tutor

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Elementary,Middle School,High School,College,University,PHD

Expertise:
Algebra,Applied Sciences See all
Algebra,Applied Sciences,Biology,Calculus,Chemistry,Economics,English,Essay writing,Geography,Geology,Health & Medical,Physics,Science Hide all
Teaching Since: May 2017
Last Sign in: 398 Weeks Ago, 6 Days Ago
Questions Answered: 66690
Tutorials Posted: 66688

Education

  • MCS,PHD
    Argosy University/ Phoniex University/
    Nov-2005 - Oct-2011

Experience

  • Professor
    Phoniex University
    Oct-2001 - Nov-2016

Category > Management Posted 04 Apr 2018 My Price 8.00

MNC headquartered

Part 1: Your firm is an MNC headquartered in the United States. You have been tasked with estimating the weighted average cost of capital (WACC) given the following information:

• Firm’s bond yield: 8%

• Treasury rate: 3% • Beta: 1.5

• Expected market return: 11%

• Target Capital Structure: 30% debt, 70% equity

• Tax bracket: 35%

Part 2:

Texas Co. (TC) established a subsidiary in Russia two years ago. Under its original plans, TC intended to operate the subsidiary for a total of four years. Exchange forecasts suggest the ruble will likely depreciated from the current level of $0.033 to $0.028 to $0.025 over the next few years.TC could sell the subsidiary today for 5 million rubles to a potential acquirer. If TC continues to operate the subsidiary, it will generate cash flows of 3.5 million rubles next year and 4.5 million rubles in the following year. These cash flows would be remitted back to the parent in the U.S. The required rate of return of the project is 15 percent.

Should TC continue operating the Russian subsidiary?

Answers

Maurice Tutor
(5)
Status NEW Posted 04 Apr 2018 02:04 PM My Price 8.00

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