Grupo Modelo, a brewery out of Mexico that exports such well-known varieties as Corona, Modelo and Pacifico, is Mexican by incorporation. However, the company evaluates all business results, including financing costs, in U.S. dollars. The company needs to borrow $100,000,000 or the foreign currency equivalent for four years. For all issues, interest is payable once per year, at the end of the year. Available alternatives are: a. Sell Japanese yen bonds at par yielding 3% per annum. The current exchange rate is V106/$, and the yen is expected to strengthen against the dollar by 2% for b. Sell euro-denominated bonds at par yielding 7% per annum. The current exchange rate is $1.1960/6, and the euro is expected to weaken against the dollar by 2% c. Sell U.S. dollar bonds at par yielding 5% per annum Which course of action do you recommend Grupo Modelo take and why? Japanese euro US dollar Alternatives yen bonds bonds bonds Coupon rate 3.000% 7.000% 5.000% Current spot rate, yen'$ 106.00 S 1.1960 Expected change in the value of the foreign currency per year 2.000% -2.000% 0.000% Principal needed by Grupo Modelo 100,000,000