11:04 29/03/2023 Midterm test - Second Chance!

Câu hỏi 1

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Please explain the benefits and the advantages of all factors that affect the cost of capital of MNCs.

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Câu hỏi 2

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CYZ Inc. in Korean plans to build new manufacturing to produce and sell products in Vietnam. The initial investment for the manufactory is financed 35% by debt and 65%
by issuing new stock. The company has to pay loan principal by straight-line method in 3 years.  The Inc. plans to reinvest retained earnings to expand the production
line.

The Vietnamese government imposes a 15% income tax, a 10% withholding tax and does not have any restrictions on remitting funds.  The annual fixed asset depreciation
rate is 25% and the 85% remaining value of the fixed asset is recognized as after-tax salvage value.

The company forecasts the detailed business activities of the project for the next three years as follows.

1Loan interest rate 12%

2Cost of issuing stock 14%
3Retained earnings 15%
4Initial Investment KRW            2,000,000.00
Year 0 Year 1  Year 2 Year 3
                                                                                      
5The demand for products per year (unit)
30,000 40,000 50,000
                                                            
6Selling price per unit (VND)                                    1,500
1,000 1,200
7Variable cost per unit (VND)                                   250                                     230                                        220
                                                               
8Annual lease and other fixed expenses (VND)
1,000,000 1,000,000 1,000,000
                                                                                           
9Spot exchange rate (KRW/VND)                                    18.00
18.00 19.00 20.00
                                                            
10Forward exchange rate (KRW/VND)                                    18.00
18.00 18.00
% hedging of the remitted fund after
11 90.0%
withholding taxes

a Weighted Average Cost of Capital

b Interest expenses

c Loan principal payment

d Annual Fixed asset depreciation

e Salvage value

f Annual Retained earing

g NPV in non-hedging case 

h NPV in hedging case
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11:04 29/03/2023 Midterm test - Second Chance!
g g

Please upload your full calculation

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Câu hỏi 3

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Please explain how the increasing or decreasing of subsidiary financing affects the global capital structure
of MNCs. If the foreign creditor wants to charge a higher loan rate, please explain why and how does the
parent company handle that to keep the global capital structure unchanged?

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 ◄ Group Project Chuyển tới...

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