Question
A U.S.-based subsidiary wants to raise $5 million by issuing a 10-year bond denominated in Canadian dollars. The current exchange rate of the Canadian dollar
A U.S.-based subsidiary wants to raise $5 million by issuing a 10-year bond denominated in Canadian dollars.
The current exchange rate of the Canadian dollar is $.75.
(1) How many Canadian dollars are needed to raise the $5 million?
(2) Is the Canadian dollar expected to appreciate or deprepciate if the exchange rate is forecasted at $.73?
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Fundamentals of Corporate Finance
Authors: Richard Brealey, Stewart Myers, Alan Marcus
7th edition
978-0077616472, 77616472, 78034647, 978-0071314749, 71314741, 978-0078034640
