Question

Micca Metals, Inc. is a specialty materials and metals company located in Detroit, Michigan. The company specializes in specific precious metals and materials which are used in a variety of pigment applications in many other industries including cosmetics, appliances, and a variety of high tinsel metal fabricating equipment. Micca just purchased a shipment of phosphates from Morocco for 6,000,000, dirhams, payable in six months. Given the information below, calculate and compare the cost of forward and money market hedges. Assumptions Shipment of phosphates from Morocco, Moroccan dirhams Micca's cost of capital (WACC) Spot exchange rate, dirhams/S Six-month forward rate, dirhams/ Values 6,000,000 16.000% 10.00 10.20 Six-month interest rate for borrowing(per annum) Six-month interest rate for investing (per annum) United States 6.000% 5.000% Morocco 8.000% 6000%

Answer 1

Spat Rate al paymunt af loas.am diham0. and o oham = $588 253.3 10 of Funds in m diffaunt caunlis to eliminate FOREX REx Risk Sisp Javele ー@ille-rud-to-Invest-p. ) 6:/.na 요 lse 25 242.12 dihamd| iL 582524 ב712. /10 Last ng ur dant hau

otal Outanal in CONCLUSION | COMPARSON awast