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5. Mitsubishi Corporation, one of major MNCs in Japan, consider raising capital for their investment projects in international bond market. For that, Mitsubishi Corporation plan
5. Mitsubishi Corporation, one of major MNCs in Japan, consider raising capital for their investment projects in international bond market. For that, Mitsubishi Corporation plan to issue reverse dual-currency bonds as instruments. a. Why do you think Mitsubishi Corporation choose dual-currency bonds? What are the advantages? b. The following is the detail information on the reverse dual-currency bonds that Mitsubishi Corporation will issue. A 6% /$ 7-year dual-currency bond pays $825.50 at maturity. This dual-currency bond pays coupon payment at 6% coupon rate with the face value of 100,000. A comparable bond with the similar risk characteristics offers 5% which can be used as the interest rate or discount rate. The implied Y/$ exchange rate at maturity is 125/$. What is the selling price of this dual-currency bond that Mitsubishi Corporation will issue
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