105.5 a 4. (25 points) R.J. Raymond a US firm is acquiring Nabisto, Inc., a Japanese company, using a 3-yea dual-currency Eurobond as part of the financing. The dual-currency bond has a face value of JPY20 billion (equivalent to USD 100 million at the time of issues Coupons are paid in yen, but the required final principal payment is not JPY20 billion, but USD95 million. The coupon is 4.75% and the bond is issued at a premium of 1.5% with issuance fees of $75,000. Assume that the investors buying the bond can sell the dollar income they later receive using a 3-year forward rate of JPY200/USD. a. (10 points) What is the yen AIC for an investor buying this bond? Show your work. b. (5 points) If the yield on the market for 3-year bonds issued in yen by Japanese firms of similar credit quality was 2.575%, would this band be a good deal for the Japanese investors? Explain. 10 105.5 a 4. (25 points) R.J. Raymond a US firm is acquiring Nabisto, Inc., a Japanese company, using a 3-yea dual-currency Eurobond as part of the financing. The dual-currency bond has a face value of JPY20 billion (equivalent to USD 100 million at the time of issues Coupons are paid in yen, but the required final principal payment is not JPY20 billion, but USD95 million. The coupon is 4.75% and the bond is issued at a premium of 1.5% with issuance fees of $75,000. Assume that the investors buying the bond can sell the dollar income they later receive using a 3-year forward rate of JPY200/USD. a. (10 points) What is the yen AIC for an investor buying this bond? Show your work. b. (5 points) If the yield on the market for 3-year bonds issued in yen by Japanese firms of similar credit quality was 2.575%, would this band be a good deal for the Japanese investors? Explain. 10