Question 26 4 points Save Answer Kashmiri is the largest and most successful specialty goods company based in Bangalore, India. It has not entered the North American marketplace yet but is comidering establishing both cunng and destruction facilities in the United States through a wholy owned subsidary. It has approached two different investment banking advisors, Goldman Sache and Bank of New York, for estimates of what its costs of capital would be several years into the future when it planned to list its American subsidiary on a US stock exchange. Using the following assumptions by the two different arisers cakulate the prospective costs of debt aty, and the WACC for Kashmin (U.5.) Assumptions Symbol Goldman Sachs Bank of New York Components of beta P Estate of correlation between seunty and market Pje 0.18 031 Estimate standard deviation of Kashmi's returns 19.09 22.09 Estimate stands ddevation of markets retum 17.01 1604 kort kd Risk free of interest Estimate of Kashmir's cost of debt in US market Esed markeretum forward-looking Corporate usate Proportion of dett Proportionaty 3.596 6695 10.44 3509 459 5348 6.99 11 35.09 3944 6145 t D According to Goldman Sachs, Kashmir's cout of equity is (dpoints) 10.01% 10.36% 11.1895 12.06