Assume that a company just purchased a Korean company. The purchase price was Won 7,030,000,000. Of that, Won 1,000,000,000 has already been paid with the remainder due in 6 months. The current spot rate is Won 1,200/$, and the 6-month forward rate is Won 1,260/$. The company has the following investment opportunities or it can borrow at 2% per annum above these rates (add 2% to all rates in the table to get borrowing rates). The companys WACC is 10%. Compare alternative hedging strategies for the payable. What do you recommend and why?

6-month Korean interest rate	16% p.a.
6-month U.S. interest rate	4% p.a.
6-month call option on Korean won at W1,200/$	3% premium
6-month put option on Korean won at W1,200/$	2.4% premium