New Hampshire Corp. has decided to issue three-year bonds denominated in 5,000,000 Russian rubles at par. The bonds have a coupon rate of 17%. If the ruble is expected to appreciate from its current level of $.03 to $.032, $.034, and $.035 in years 1, 2,and 3, respectively.
(A) Complete the following table
Year 1 Year 2 Year 3
Payments in rubles
Forecasted exchange rate of ruble
Payments in dollars
B. What is the annual financing cost of these bonds in %?Show all culcaltaion
C. What is the financing cost of these bonds? Show all culcaltaion
a. 17%.
b. 23.18%.
c. 22.36%.
d. 23.39%.