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Tuba City Manufacturing, Inc., a U. multinational company, has the following debt components in its consolidated capital section: dollar-denominated...

5. 5. Tuba City 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%
U.S. dollar-denominated 5-year Euronotes at 4.00%
Euro-denominated 10-year bonds at 5.00%
Yen-denominated 20-year bonds at 2%
Common stock
Retained earnings $10,000,000
$4,000,000
€6,000,000
¥750,000,000
$35,000,000
$15,000,000
Tuba City’s finance staff estimates their cost of equity to be 20%. Current exchange rates are
European euros $1.24/€
British pounds sterling $1.86/£
Japanese yen ¥109/$
Income taxes are 30% around the world after allowing for credits. Calculate Tuba City’s weighted average cost of capital. Are any assumptions implicit in your calculation?

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