What is joan percentage return from her strategy

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Reference no: EM132057902

1. Jasmine Inc has a Net Income of 510, a target equity fraction of 0.5, and a project new capital budget of 200. What should Jasmine's retained earnings be under the residual dividend model?

2. Joan Jobs does not believe that the international Fisher effect (IFE) holds. Current one-year interest rates in Europe are 12 percent, while one-year interest rates in the U.S. are 4 percent. Joan converts $100,000 to euros and invests them in France. One year later, she converts the euros back to dollars. The current spot rate of the euro is $1.17. If the spot rate of the euro in one year is $1.10, what is Joan’s percentage return from her strategy?

Reference no: EM132057902

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