소개글
[재무관리] Blades, Inc 사례(영문)에 대한 자료입니다.
목차
1. Effect of Exchange rate movement
2. Construct a spreadsheet to determine the annual effective financing percentage cost of the yen-denominated notes issued in each of the three scenarios for the future value of the yen. What is the probability that the financing cost of issuing yen-denominated notes is higher than the cost of issuing baht-denominated notes?
3. Using a spreadsheet, determine the expected annual effective financing percentage cost of issuing yen-denominated notes. How does this expected financing cost compare with the expected financing cost of the baht-denominated notes?
4. Based on your answers to the previous questions, do you think Blades should issue yen- or baht-denominated notes?
5. What is the tradefoo involved?
본문내용
Summary
The directors voted to establish
a subsidiary in Thailand
- Its initial estimates = 550 million Thai Baht(TB)
= $ 12.65 million (∵ spot rate = $0.023/TB)
- Now Blades has $2.65 million available
The remaining $10 million (=TB434,782,609)
should be obtained from other sources
CFO prefers 'debt' to equity financing to raise
the funds since Blades is a relatively small
company whose stock is currently undervalued
Smart Choice?
- Two alternatives for debt financing: $10 million yen or baht-denominated notes
A. yen-denominated notes are available in increments of ¥125,000
TB434,782,609 ÷ TB0.347826/¥ (spot rate) = ¥1,250,000,313
∴ ¥1,250,000,313 ÷ ¥125,000 =
10,000 yen-denominated notes
coupon rate = 10%
B. baht-denominated notes are available in increments of TB50,000
∴ TB434,782,609 ÷ TB50,000 =
8,696 baht-denominated notes
coupon rate = 15% (due to its unfavorable economic conditions)
The yen is expected to be appreciated
(versus the baht) in the future
- Since its future is uncertain, CFO
compiled the following probability
These expected appreciation of the yen should be
taken into consideration for effective financing