Political risk is always an issue of doing businesses in a foreign country. A MNC is considering a 6-year project in Israel.

Political risk is always an issue of doing businesses in a foreign country. A MNC is considering a 6-year project in Israel. When project ends, assets are planned to be sold for Israel shekel (ILS) 50 million. However, there is a 20% probability the assets are confiscated. The company plans to buy insurance to cover such a loss. Given its WACC of 13%, what will be the maximum premium? Exchange rate remains constant at $/ILS = 0.25.