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Corus Inc. is a US company that also has operations in Colombia. It is trying to estimate a cost of capital in Colombian pesos and
Corus Inc. is a US company that also has operations in Colombia. It is trying to estimate a cost of capital in Colombian pesos and you have been provided the following information. Colombia has US$ denominated government bonds outstanding, with a 4.8% interest rate, and Colombian peso denominated bonds, with an interest rate of 6.0%. If the US treasury bond rate is 2.3% and Colombia's local currency rating is equal to its foreign currency rating, estimate the risk free rate in Colombian Pesos.
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