Fin 565 week 6 - Study guides, Class notes & Summaries

FIN 565 Week 6 Case Study; Small Business Dilemma, Page 501, text

1. Question: Pricing a Foreign Target Alaska, Inc., would like to acquire Estoya Corp., which is located in Peru. In initial negotiations, Estoya has asked for a purchase price of 1 billion Peruvian new sol. If Alaska completes the purchase, it would keep Estoya’s operations for two years and then sell the company. In the recent past, Estoya has generated annual cash flows of 500 million new sol per year, but Alaska believes that it can increase these cash flows 5 percent each year by improvin...

FIN 565 Week 3 Homework Solutions Question: Covered Interest Arbitrage Assume the following information: Question: Interest Rate Parity Consider investors who invest in either U.S. or British one-year Treasury bills. Assume zero transaction costs and no taxes. a) If interest rate parity exists, then the return for U.S. investors who use covered interest arbitrage will be the same as the return for U.S. investors who invest in U.S. Treasury bills. Is this statement true or false? If false, co...

FIN 565 Week 8 Final Exam (Version 1) Question: (TCO A) A high home inflation rate relative to other countries would the home country’s current account balance, other things being equal. A high growth in the home income level relative to other countries would the home country’s current account balance, other things being equal. (Points :5) Question: (TCO A) Assume the Canadian dollar is equal to $0.98 and the Brazilian real is equal to $0.28. The value of the Brazilian real in Canadian dol...

1. Question: Pricing a Foreign Target Alaska, Inc., would like to acquire Estoya Corp., which is located in Peru. In initial negotiations, Estoya has asked for a purchase price of 1 billion Peruvian new sol. If Alaska completes the purchase, it would keep Estoya’s operations for two years and then sell the company. In the recent past, Estoya has generated annual cash flows of 500 million new sol per year, but Alaska believes that it can increase these cash flows 5 percent each year by improvin...

FIN 565 Week 6 Case Study; Small Business Dilemma, Page 501, text

FIN-565 Week 6 Homework Solutions Question: Pricing a Foreign Target Alaska, Inc., would like to acquire Estoya Corp., which is located in Peru. In initial negotiations, Estoya has asked for a purchase price of 1 billion Peruvian new sol. If Alaska completes the purchase, it would keep Estoya’s operations for two years and then sell the company. In the recent past, Estoya has generated annual cash flows of 500 million new sol per year, but Alaska believes that it can increase these cash flo...

FIN 565 Week 7 Homework Solutions Question: Banker’s Acceptances Describe how foreign trade would be affected if banks did not providetrade- related services. How can a banker’s acceptance be beneficial to an exporter, an importer, anda bank? 2. Question: Letters of Credit Ocean Traders of North America is a firm based in Mobile, Alabama, that specializes in seafood exports and commonly uses letters of credit (L/Cs) to ensure payment. It recently experienced a problem, however. Ocean T...