Similar setup as above: You are considering a new project in Mexico. At first, you plan on financing all with equity. You estimate a beta for your project of 1.3 , that the risk premium is 7%, and that the risk-free rate is 1%. The initial cost is $10 million dollars, and the project provide $900,000 in aftertax cash flows per year forever. You face a 21% tax rate. Mark all of the below that are true. If you finance with 50% debt, that will increase your APV. If you finance with 50% debt, that will decrease your APV. Borrowing in Mexico can decrease your foreign exchange risk. Borrowing in the U.S. and doing a swap would be similar to borrowing in Mexico but could potentially lower your rate. Financing at a higher rate is more advantageous for your company as it lowers your APV. QUESTION 8 Mark all of the below which are true. An ADR is an international debt offering. Small international companies are more likely to issue ADRs than large international companies. Companies from countries with better governance laws gain more from issuing ADRs than companies from countries with poor governance laws. None of the above. Similar setup as above: You are considering a new project in Mexico. At first, you plan on financing all with equity. You estimate a beta for your project of 1.3 , that the risk premium is 7%, and that the risk-free rate is 1%. The initial cost is $10 million dollars, and the project provide $900,000 in aftertax cash flows per year forever. You face a 21% tax rate. Mark all of the below that are true. If you finance with 50% debt, that will increase your APV. If you finance with 50% debt, that will decrease your APV. Borrowing in Mexico can decrease your foreign exchange risk. Borrowing in the U.S. and doing a swap would be similar to borrowing in Mexico but could potentially lower your rate. Financing at a higher rate is more advantageous for your company as it lowers your APV. QUESTION 8 Mark all of the below which are true. An ADR is an international debt offering. Small international companies are more likely to issue ADRs than large international companies. Companies from countries with better governance laws gain more from issuing ADRs than companies from countries with poor governance laws. None of the above