Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Corporate Finance Expert

Attempt all the problems. 

Section-A

problem1) Describe the issues involved in international capital budgeting decisions. Are the traditional methods of evaluating capital budgeting decisions appropriate, why?

problem2) What are the various types of foreign exchange exposure? describe the methods to hedge foreign exchange exposure.

problem3)a) What are currency derivatives? Distinguish currency forward with currency futures.

b. An Indian exporter who has 3 month receivable of US$ 10,000 wants to hedge his position. Present spot rate of Rs/$ is 58.75 and Rs. is likely to appreciate in 3 months by at least 15%. How could the exporter hedge his position if the forecast it accurate? Show your calculation.

problem4) What are the International sources of funds? Describe after categorizing it into equity & debt fund and long-term & short term.

Section-B

Case Study

Company A is AAA rated Indian company who wishes to raise US$ 10 million to fund its US subsidiary from international market including US market.  It could raise funds through 10.50 % fixed rate bonds.  Alternatively, it could raise it through a floating rate bond at LIBOR + 0.50%. 
The present exchange rate is Rs.50/US$.

Company B is BBB rated US Company who wishes to raise Rs. 500 million from Indian market to finance its Indian subsidiary.  It could raise funds through 12.50 % fixed rate bonds. Alternatively, it could raise it through a floating rate bond at LIBOR + 1.25%.

Case problems:

Suppose that you are a swap dealer, who charge 0.50 % fee.  Design a swap deal for Company A and Company B in such a way that it benefits both Companies.  Also determine the fees of swap dealer and net saving for each company in the first year.

Corporate Finance, Finance

  • Category:- Corporate Finance
  • Reference No.:- M93204

Have any Question? 


Related Questions in Corporate Finance

Mining of metallic ores often causes harm to the

Mining of metallic ores often causes harm to the environment in the area around the mines. Some countries impose strict policies to limit the environmental damage caused by this mining, but others do not. The mining comp ...

What are the implications of the following fed activitiesa

What are the implications of the following Fed activities? a. The Fed sells securities using reverse repurchase agreements. b. The Fed buys securities using system repurchase agreements. c. The Fed makes outright purchas ...

Assignmentchapter 3please remember that you must do your

Assignment Chapter 3 Please remember that you must do your own work. Any plagiarism will result in a grade of zero for all students involved. Please use your own words even if you are using the textbook for answers. Alwa ...

Assignmenta company considers the following investment

Assignment A company considers the following investment projects. Both projects involve the purchase of machinery with a life span of five years. • Project A would generate annual cash flows of $150,000; the machinery wo ...

Why does a company in financial distress with an

Why does a company in financial distress with an underfunded pension scheme have an incentive to invest in equities rather than bonds?

When is the market for real money balances in

When is the market for real money balances in equilibrium?  If the Fed engages in open market sales, what happens to the supply of real balances?

Suppose the phillips curve becomes steeper a given change

Suppose the Phillips curve becomes steeper: a given change in output has a larger effect on inflation. How does this affect the time consistency problem facing the central bank and the likelihood of high inflation?

General requirementsyou are working for a big consulting

General Requirements You are working for a big consulting firm in the area of financial advisory. You are approached by a publicly listed Australian company and seek your advice on how to fund future expansion plans. You ...

Start-up budgetingfor this assignment you will decide what

Start-up Budgeting For this assignment, you will decide what type of budget to implement for a start-up company. Write three pages paper in which you: 1. Summarize the type of manufacturing company you plan to start up a ...

Do some research on the consumer financial protection

Do some research on the Consumer Financial Protection Bureau, established in 2010 (the text Web site links to the bureau's site). What regulations on credit cards has the bureau created? Is it considering additional regu ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate