# Economics-AW-Q421

## Economics-AW-Q421 Online Services

Problem 17-13

Foreign Investment Analysis

Chapman, Inc.’s Mexican subsidiary, V. Gomez Corporation, is expected to pay to Chapman 5 pesos in dividends in 1 year after all foreign and U.S. taxes have been subtracted. The exchange rate in 1 year is expected to be \$0.05 per peso. After this, the peso is expected to depreciate against the dollar at a rate of 5% a year forever due to the different inflation rates in the United States and Mexico. The peso-denominated dividend is expected to grow at a rate of 7% a year indefinitely. Chapman owns 20 million shares of V. Gomez. What is the present value of the dividend stream, in dollars, assuming V. Gomez’s cost of equity is 14%? Do not round intermediate calculations. Round your answer to the nearest dollar. Enter your answer in dollars.
\$______________

Problem 17-1

Cross Rates

At today’s spot exchange rates 1 U.S. dollar can be exchanged for 11 Mexican pesos or for 111.35 Japanese yen. You have pesos that you would like to exchange for yen. What is the cross rate between the yen and the peso; that is, how many yen would you receive for every peso exchanged? Round your answer to two decimal places.
___________ yen per peso
Problem 14-12

Stock Repurchase

Bayani Bakery’s most recent FCF was \$45 million; the FCF is expected to grow at a constant rate of 6%. The firm’s WACC is 14% and it has 15 million shares of common stock outstanding. The firm has \$30 million in short-term investments, which it plans to liquidate and distribute to common shareholders via a stock repurchase; the firm has no other nonoperating assets. It has \$368 million in debt and \$63 million in preferred stock.

a. What is the value of operations? Enter your answer in millions. For example, an answer of \$1.2 million should be entered as 1.2, not 1,200,000. Round your answer to two decimal places.

\$ ___________ million

b. Immediately prior to the repurchase, what is the intrinsic value of equity? Enter your answer in millions. For example, an answer of \$1.2 million should be entered as 1.2, not 1,200,000. Round your answer to two decimal places.
\$ ____________ million

c. Immediately prior to the repurchase, what is the intrinsic stock price? Round your answer to the nearest cent.
\$ _____________ per share

d. How many shares will be repurchased? Enter your answer in millions. For example, an answer of \$1.2 million should be entered as 1.2, not 1,200,000. Round your answer to two decimal places.
___________ million shares

How many shares will remain after the repurchase? Enter your answer in millions. For example, an answer of \$1.2 million should be entered as 1.2, not 1,200,000. Round your answer to two decimal places.
_____________ million shares

e. Immediately after the repurchase, what is the intrinsic value of equity? Enter your answer in millions. For example, an answer of \$1.2 million should be entered as 1.2, not 1,200,000. Round your answer to two decimal places.
\$ _____________ million

\$ _____________ per share

Problem 14-4

Stock Repurchase

A firm has 10 million shares outstanding with a market price of \$15 per share. The firm has \$20 million in extra cash (short-term investments) that it plans to use in a stock repurchase; the firm has no other financial investments or any debt. What is the firm’s value of operations after the repurchase? Enter your answer in millions. For example, an answer of \$1.2 million should be entered as 1.2, not 1,200,000. Round your answer to two decimal places.
\$ ¬¬¬¬¬_________ million

How many shares will remain after the repurchase? Round your answer to the nearest whole number.
_____________shares

Problem 17-3

A computer costs \$610 in the United States. The same model costs 560 euros in France. If purchasing power parity holds, what is the spot exchange rate between the euro and the dollar? Round your answer to two decimal places.
\$1 = ______________ euros

Problem 14-7

You can read more about our case study assignment help services here.

## How it Works

#### How It works ?

Step 1:- Click on Submit your Assignment here or shown in left side corner of every page and fill the quotation form with all the details. In the comment section, please mention Case Id mentioned in end of every Q&A Page. You can also send us your details through our email id support@assignmentconsultancy.com with Case Id in the email body. Case Id is essential to locate your questions so please mentioned that in your email or submit your quotes form comment section.

Step 3:- Once we received your assignments through submit your quotes form or email, we will review the Questions and notify our price through our email id. Kindly ensure that our email id assignmentconsultancy.help@gmail.com and support@assignmentconcultancy.com must not go into your spam folders. We request you to provide your expected budget as it will help us in negotiating with our experts.

Step 4:- Once you agreed with our price, kindly pay by clicking on Pay Now and please ensure that while entering your credit card details for making payment, it must be done correctly and address should be your credit card billing address. You can also request for invoice to our live chat representatives.

Step 5:- Once we received the payment we will notify through our email and will deliver the Q&A solution through mail as per agreed upon deadline.

Step 6:-You can also call us in our phone no. as given in the top of the home page or chat with our customer service representatives by clicking on chat now given in the bottom right corner.

## Case Approach

#### Scientific Methodology

We use best scientific approach to solve case study as recommended and designed by best professors and experts in the World. The approach followed by our experts are given below:

Defining Problem

The first step in solving any case study analysis is to define its problem carefully. In order to do this step, our experts read the case two three times so as to define problem carefully and accurately. This step acts as a base and help in building the structure in next steps.

Structure Definition

The second step is to define structure to solve the case. Different cases has different requirements and so as the structure. Our experts understand this and follow student;s university guidelines to come out with best structure so that student will receive best mark for the same.

Research and Analysis

This is the most important step which actually defines the strength of any case analysis. In order to provide best case analysis, our experts not only refer case materials but also outside materials if required to come out with best analysis for the case.

Conclusion & Recommendations

A weak conclusion or recommendations spoil the entire case analysis. Our expert know this and always provide good chunks of volume for this part so that instructors will see the effort put by students in arriving at solution so as to provide best mark.

## Related Services

Stock Split

Suppose you own 1,000 common shares of Laurence Incorporated. The EPS is \$9.00, the DPS is \$4.00, and the stock sells for \$85 per share. Laurence announces a 2-for-1 split. Immediately after the split, how many shares will you have?

EPS \$ ____________

DPS \$ _____________

What would you expect the stock price to be? Round your answer to the nearest cent.
\$

Problem 17-9

Exchange Gains and Losses

Your Boston-headquartered manufacturing company, Wruck Enterprises, obtained a 57 million peso loan from a Mexico City bank last month to fund the expansion of your Monterrey, Mexico plant. When you took out the loan the exchange rate was 73 U.S. cents per peso, but since then, the exchange rate has dropped to 68 U.S. cents per peso. Has Wruck Enterprises made a gain or a loss due to the exchange rate change, and how much? Note that your shareholders live in the United States. Round your answer to the nearest dollar. Enter your answer in dollars.
Of \$ _________________ .

Problem 14-1

Residual Distribution Model

Puckett Products is planning for \$2.4 million in capital expenditures next year. Puckett’s target capital structure consists of 30% debt and 70% equity. If net income next year is \$2.5 million and Puckett follows a residual distribution policy with all distributions as dividends, what will be its dividend payout ratio? Round your answer to two decimal places.
__________________ %

Product Code-Economics-AW-Q421