Assume the following information for maximus co a us-based, Ask an Expert

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Assume the following information for Maximus Co., a U.S.-based MNC that is considering obtaining funding for a project in Germany:

U.S. risk-free rate = .04

German risk-free rate = .06

Risk premium on dollar-denominated debt provided by U.S. creditors = 0.04

Risk premium on euro-denominated debt provided by German creditors = .04

Beta of project = 1.2

Expected U.S. market return = .10

U.S. corporate tax rate = 0.32

German corporate tax rate = .40

What is Maximus’s cost of dollar-denominated debt?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92349861

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