Question: PUI Call question, select the BEST answer. 1 Compute Beta of the foreign market (Bf) based on the following: Standard deviation of the domestic market
PUI Call question, select the BEST answer. 1 Compute Beta of the foreign market (Bf) based on the following: Standard deviation of the domestic market (ad) = 0.65 Standard deviation of the foreign market (af) = 0.92 Correlation coefficient (p) = 0.62 0.3708 0.4380 0.8775 0.9734 o 2 Determine the cost of Equity for a foreign investment. You have the following information: 3.10% US risk-free rate 9.50% Expected US market returns 1.20 Beta of the asset against the US market 1.40 Beta of the foreign market against the US market 35.00% US tax rate 40.00% Foreign tax rate a b C d 10.78% 14.50% 12.06% 13.85%
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