What are the all-in costs after hedging

Reference no: EM131496798

International Corporate Finance Assignment

The R.J. Reynolds International ("RJR") Financing Case Study.

1. Examine the types of securities being recommended to RJR as financing alternatives in August, 1985. As RJR's treasurer, comment on which specific types of securities you would be considering as well suited to RJR's current liability structure and overall financing program. (NARRATIVE) 3 maximum pgs

Acquisition 4.9 Billion +12 Billion in taxes +12 Billion in preferred stock?

debt or equity?DO NOT ARGUE BOTH
if debt what maturities?
fixed rate or floating rate?
currency match or mismatch?
issue in domestic, foreign, or Euromarkets?

2. What are the all-in costs after hedging of the following six alternatives given the pricing quotes shown in the case's Exhibits 7, 8 and 9?

SIX SPREADSHEETS AND NARRATIVE

Eurodollar bond

Euroyen bond with yen cash flows hedged into dollars

using foreign exchange long dated forward contracts
using a currency swap

Dual currency bond with yen cash flows hedged into dollars

using foreign exchange long dated forward contracts
using a coupon only currency swap

Dual currency bond with the final dollar principal payment hedged into yen and then all yen cash flows swapped into dollars

3. Assuming that RJR decides to issue a 5-year off-shore bond, which one of the six alternatives listed in 2.) above would you recommend? Defend your recommendation bearing in mind that cost may be only one of several key criteria important to RJR.

Attachment:- Case Study.rar

Reference no: EM131496798

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len1496798

5/15/2017 8:00:51 AM

Topic: Finance. Detailed Question: This is my third assignment with you guys. Im submitting my final paper with hopes that it would be better than the last. My professors comments was "i'm afraid totally irrelevant to the question." I am attaching the case study and the questions. Please only answer question number 1 and see the comments/notes in bold next to it. I really hope i can make up my grade with this narrative.

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