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Medex, a Florida corporation, has an account receivable (A/R) from a Canadian customer for C$ 5 million due in 6 months. Given the following information: Spot rate: C$ 1.000 / US$ 6 month Forward rate: C$ 1.080 / US$ 6 months Canadian interest rate: 3.70 % 6 months U.S. interest rate: 1.50 % Six month C$ call at strike price of C$1.00 / US$ is $0.040 per C$. Six month C$ put at strike price of C$1.00 / US$ is $0.030 per C$. Amount of account receivable: C$ 5,000,000 How would you hedge the account receivable (A/R) using the Forward Market, Money Market and the Options market? Calculate the U.S. dollar equivalent of the hedged amount of the account receivable, for each method write out the steps and amounts involved so yo can receive full credit. If Medex hedges the FX risk, what other risk does it still face with respect to the A/R?
Kuhns Corp. has 200,000 shares of preferred stock outstanding that is cumulative. The dividend is $3.00 per share and has not been paid for 3 years. If Kuhns earned $1 million this year, what could be the maximum payment to the preferred stockhold..
the modern language division earned 1.6 million on net assets of 20 million. the cost of capital is 11.5 percent.
marissa participates in her employers nonqualified deferred compensation plan. for 2013 she is deferring 15 percent of
The loan requires quarterly payments for a period of 3 years. If the 1st payments is due 3 months after buying the car, what will be the amount of Sue's quarterly payments on the loan?
Such concern has centered on esoteric financial products such as derivatives that are used to manage risk. What is the significance and importance of sound business decision-making in risk and risk management in business?
Clearly and concisely describe what is meant by the time value of money and what the terms future value and present value represent. Explain.
Mr. Husker's Tuxedos Corp. ended the year 2015 with an average collection period of 34 days. The firm's credit sales for 2015 were $56.3 million.
Marisa has a policy with replacement price coverage and 80 percent co-insurance, & has a loss of $100,000 on her house. The replacement price is $400,000 & total policy coverage is $300,000.
the total book value of the firms equity is 10 million book value per share is 20. the stock sells for a price of 35
Johnson Catering Corporation will pay a $2.65 per share dividend next year. The firm pledges to rise its dividend by 4.75% per year, indefinitely.
What is the IRR on a perpetuity that originally cost $1094.41 has an annual payment of $141.09? Carry your answer to two decimal places. For example enter 15.25 for 15.25%
what is the present value of perpetuity of 100 per year if the appropriate discount rate is 7? if interest rates in
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