A U.S importer has just made a contract with a Korean manufacturer to purchase a fabricator machinery and must pay the invoice in 6 months from now. Purchase price is 18,500,000 Korean Won and the current spot rate is Won1,050/$. He has decided to hedge the transaction with option and he has received the following quotations from a bank:

Call option on Korean Won : Strike price : 1,200.00 Won; option premium: 3%

Put option on Korean Won : Strike price : 1,200.00 Won; option premium: 2.4%

What would be the maximum cost after six months for this U.S importer, with option hedging, if his WACC is 10% p.a.?

Select one:

a.$ 14,785.77

b.$ 15,998.10

c.$ 15,971.67

d.$ 14,812.20