Based firm decides to issue threeyear bond denominated

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1. A U.S. based firm decides to issue a threeyear bond denominated in 5,000,000 Russian rubles at par. The bond has 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, what is the financing cost of this bonds in $ terms?

2. A U.S. based firm decides to issue a threeyear bond denominated in 5,000,000 Russian rubles at par. The bond has a coupon rate of 17%. If the ruble is expected to depreciate by 2% per year from its current level of $.03 for the next 3 years, what is the financing cost of this bonds in $ terms?

Reference no: EM131178027

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