Determine the value the U.S. based MNC with the following free cash flow and exchange rate estimations. The MNC has operations in Bangladesh and India. Year 1 Year 2 Year 3 Year 4 Year 5 Expected Exchange rates USD vs INR 50 47 45 42 40 USD vs BDT 80 84 88 92 97 Expected free cash flows (in millions) India (in INR) 5000 5000 4000 4000 *40000 Bangladesh (in BDT) 8000 8000 9000 9000 *80000 USA (in USD) 200 200 300 300 *3000 The firm has an overall cost of capital of 12%

International Financial Management
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ISBN:9780357130698
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ChapterP2: Part 2: Exchange Rate Behavior
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3. Determine the value the U.S. based MNC with the following free cash flow and exchange rate estimations. The MNC has operations in Bangladesh and India.

Year 1 Year 2 Year 3 Year 4 Year 5
Expected Exchange rates
USD vs INR 50 47 45 42 40
USD vs BDT 80 84 88 92 97
Expected free cash flows (in millions)
India (in INR) 5000 5000 4000 4000 *40000
Bangladesh (in BDT) 8000 8000 9000 9000 *80000
USA (in USD) 200 200 300 300 *3000
The firm has an overall cost of capital of 12%

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