Copper Mountain Group us. The Copper Mountain Group a private equity firm headqu

Question

Copper Mountain Group us. The Copper Mountain Group a private equity firm headquartered n Boulder, Colorado bomo sf 4 for one ear a 37 %interest a. What is the dollar cost of this debt if the pound depreciates from $2.0290/E to $1.9430/E over the year? b. What is the dollar cost of this debt if the pound appreciates from $2.0290/E to $2.1640/E over the year? a. What is the dollar cost of this debt if the pound depreciates from $2.0290/E to $1.9430VE over the year? 96 (Round to two decimal places.) Enter your answer in the answer box and then click Check Answer part remaining Clear All

Explanation / Answer

a)

Amount borrowed = £4,900,000×$2.029 =$9,942,100

Payment after 1 year = £4,900,000×1.07375×1.943 = $10,222,851.63

Dollar cost:

= ($10,222,851.63/$9,942,100 - 1)

= 2.82%

b)

Amount borrowed = £4,900,000×$2.029 =$9,942,100

Payment after 1 year = £4,900,000×1.07375×2.164 = $11,385,615.50

Dollar cost:

= ($11,385,615.50/$9,942,100 - 1)

= 14.52%

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.