Bond financing analysis. Sambuka plc can issue bonds in either UK pounds or in Swiss francs.

Pound-denominated bonds would have a coupon rate of 15%; Swiss franc-denominated bonds would have a coupon rate of 12%. Assuming that Sambuka can issue bonds worth £10 000 000 in either currency, that the current exchange rate of the Swiss franc is £0.47, and that the forecasted exchange rate of the franc in each of the next three years is

£0.50, what is the annual cost of financing for the franc-denominated bonds? Which type of bond should Sambuka issue?