Firm m's earnings and stock price tend to move up and down with other firms in the s& p 500, while firm w's earnings and stock price move counter cyclically with m and other s& p companies. both m and w estimate their costs of equity using the capm, they have identical market values, their standard deviations of returns are identical, and they both finance only with common equity. which of the following statements is correct?
a. m and w should have identical waccs because their risks as measured by the standard deviation of returns are identical.
b. m should have the lower wacc because it is like most other companies, and investors like that fact.
c. if m and w merge, then the merged firm mw should have a wacc that is a simple average of m's and w's waccs.
d. without additional information, it is impossible to predict what the merged firm's wacc would be if m and w merged.
e. since m and w move counter cyclically to one another, if they merged, the merged firm's wacc would be less than the simple average of the two firms' waccs.

give me why

The east asiatic company (eac), a danish company with subsidiaries throughout asia, has been funding its bangkok subsidiary primarily with u.s. dollar debt because of the cost and availability of dollar capital as opposed to thai baht-denominated (b) debt. the treasurer of eac-thailand is considering a 1-year bank loan for $247,000.the current spot rate is b32.03 /$, and the dollar-based interest is 6.78% for the 1-year period. 1-year loans are 12.04% in baht.a. assuming expected inflation rates of 4.3 % and 1.24% in thailand and the united states, respectively, for the coming year, according to purchase power parity, what would the effective cost of funds be in thai baht terms? b. if eac's foreign exchange advisers believe strongly that the thai government wants to push the value of the baht down against the dollar by5% over the coming year (to promote its export competitiveness in dollar markets), what might the effective cost of funds end up being in baht terms? c. if eac could borrow thai baht at 13% per annum, would this be cheaper than either part (a) or part (b) above?