A Ghanaian multinational company has total assets valued at GHS200 million with debt amounting to GHS40 million.

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Question:

A Ghanaian multinational company has total assets valued at GHS200 million with debt amounting to GHS40 million. The cost of debt before tax of this multinational is 10% whilst its cost of financing with equity is 16%. If the MNC has a corporate tax rate of 34%, find the firm’s weighted average cost of capital.

The current cedi euro spot rate is GHS5.5555/€. Assume the inflation rate in the eurozone is 4% and that of Ghana is 12% and that they are expected to persist in the foreseeable future. If a Ghanaian businesswoman who imports goods from the eurozone is expected to import goods to the tune of two million euros (€2,000,000) in the coming year

(i) What budget estimate in cedis should be made towards the payment of the imports from France in the eurozone? Assume PPP holds.

(ii) What budget estimate in cedis should be made towards the payment of imports in the second year for imports amounting to three million euros (€3,000,000). Again assume that PPP holds.

Ford America has exported cars to Switzerland to the tune of ten million Swiss francs (CHF10,000,000). This amount is expected to be received in 90 days by Ford America. Ford America believes the 90-day forward rate is an accurate forecast of the future spot rate. The 90-day forward rate of the Swiss franc is $0.98. A put option is available with a strike price of $0.99 and a premium of $0.03. As a financial manager of Ford America, analyze how much Ford America is expected to receive as net sales from this export in US dollars.

The table below shows the currencies of selected four countries, Russia, Kenya, United Arab Emirates, and South Africa buying a unit of the UK pound, the US dollar, and the European Union euro. Figures are closing rates taken on a particular day in 2018. Using the concept of cross rates, fill in the spaces marked X using the available information.

Country	Currency	£ STG	$ US	€ Euro
Russia	Rouble	X	61.4472	72.1301
Kenya	Shilling	135.4700	X	X
United Arab Emirates	Dirham	4.9198	3.6732	4.3118
South Africa	Rand	X	12.3976	X