Question: Window Rock Manufacturing, Inc., a U.S. multinational company, has the following debt components in its consolidated capital section: U.S. dollar-denominated 25-year bonds at 6.00%...............................$10,000,000 U.S.

Window Rock Manufacturing, Inc., a U.S. multinational company, has the following debt components in its consolidated capital section:
U.S. dollar-denominated 25-year bonds at 6.00%...............................$10,000,000
U.S. dollar-denominated 5-year Euro notes at 4.00%...........................$4,000,000
Euro-denominated 10-year bonds at 5.00%.........................................€ 6,000,000
Yen-denominated 20-year bonds at 2%............................................¥750,000,000
Common stock.....................................................................................$35,000,000
Retained earnings................................................................................$15,000,000
Window Rock's finance staff estimates their cost of equity to be 20%. Current exchange rates are: Income taxes are 30% around the world after a flowing for credits. Calculate Window Rock's weighted average cost of capital. Are any assumptions implicit in your calculation?

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