A foreign subsidiary does not have an independent cost of capital. However, in order to estimate the
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A foreign subsidiary does not have an independent cost of capital. However, in order to estimate the discount rate for a comparable host-country firm, the analyst should try to calculate a hypothetical cost of capital. How is this done?
Discount RateDepending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal...
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As part of this process the analyst can estimate the su...View the full answer
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Related Book For 
Multinational Business Finance
ISBN: 978-0134796550
15th edition
Authors: David K. Eiteman, Arthur I. Stonehill, Michael H. Moffett
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