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Daytona Inc. (DI) currently has no foreign cash flows. DI is planning on issuing bonds and is considering two options. Option 1 would be to
Daytona Inc. (DI) currently has no foreign cash flows. DI is planning on issuing bonds and is considering two options. Option 1 would be to issue bonds denominated in euros with a fixed interest rate. Option 2 is to issue a bond denominated in U.S. dollars with a floating interest rate. DI has estimated the expected dollar-denominated cash flows for each potential bond issue. Which bond has greater uncertainty for its future cash flows? Explain.
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