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COST OF CAPITAL





            Cost of Capital to Evaluate Foreign Investments







            STEP 2:    Calculate the nominal rate for the UK operations


            (1 + i)(1 + r)  = (1 + n)



            (1 + 0.03)(1 + 0.11927)  = (1 + n)



            1.15285 = (1 + n)



            n = 15.28%






            Therefore a WACC of 15.28% should be used to

            evaluate the UK investment.









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