1
Q
interest rate differential
A
which ever country has the higher interest rate will be depreciating relative to the other
2
Q
Free Cash flow
A
FCF = EBIT * (1 - Host country tax) + depreciation - capital expenditure - change in net working capital
3
Q
domestic dividend pre tax
A
(FCF - withholding tax)/exchange rate
4
Q
Dividend Net tax
A
pre tax dividend - dom tax
5
Q
cost of goods sold
A
(Unit labour cost + unit semi goods cost) * unit sales
6
Q
EBIT
A
EBIT = Revenue - (CGS + depreciation + Admin costs)
7
Q
dom tax
A
tentative tax – tax credit
8
Q
tentative tax
A
Dom dividend pre tax x dom tax
