5)Minnie Corp. a US Company with no other inflows or outflows, has decided to issue 80 million Euros worth of three-year bonds with a 5% annual coupon denominated in Euros at par. The company will use US dollars to buy the Euros need to pay off the bonds in years 1, 2 and 3.

a)If the Euro is expected to appreciate from its current level of $1.25 to $1.27, $1.29, and $1.30 in years 1, 2,and 3, respectively, what is the %cost of financing these bonds to the US company.

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b)If the Euro is expected to depreciate from its current level of $1.25 to $1.23, $1.22, and $1.21 in years 1, 2,and 3, respectively, what is the %cost of financing these bonds to the US company.

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