1. Assume that Seminole, Inc., considers issuing a Singapore dollar denominated bond at its present coupon rate of 7 percent. It is attracted to the low financing rate. Assume that either type of bond would have a four-year maturity. Seminole needs to borrow $10 million. Therefore, if it uses bonds denominated in Singapore dollars, the par value would be Singapore dollars of $20 million. The spot rate of the Singapore dollar is $0.50. Seminole has forecasted the Singapore dollars value at the end of each of the next four years to be: $0.52, $0.56, $0.58 and $0.53. What is the discount rate of the financing?

   [Hint: First calculate the cash flow in each year given Singapore $'s, then convert those amounts to US. $ amounts and then use the IRR function in Excel to calculate the expected discount rate.

   	a.	10.12%
   	b.	8.97%
   	c.	7.05%
   	d.	33.45%