I have figured out most of this - but can't seem to get it all right. Please help! All information is below. Let me know if anything more is needed.
EEQuestIon Help v Bobcat Company. Bobcat Company, U.S.-based manufacturer of industrial equipment, just purchased a Korean company that produces plastic nuts and bolts for heavy equipment. The purchase price was Won8,300 million. Won1,000 million has already been paid, and the remaining Won7,300 million is due in six months. The current spot rate is Won1,1 101$, and the 6-month torward rate is Won1,173]$. The 6-month Korean won interest rate is 15% per annum, the 6-month U.S. dollar rate is 4.5% per annum. Bobcat can invest at these interest rates, or borrow at 2% per annum above those rates. A 6-month call option on won with a Won1 ,20015 strike rate has a 3.4% premium. while the 6-month put option at the same strike rate has a 2.7% premium. Bobcat can invest at the rates given above, or borrow at 2% per annum above those rates. Bobcat's weighted average cost of capital is 11.5%. Compare alternate ways below that Bobcat might deal with its foreign exchange exposure. a. How much in U.S. dollars will Bobcat pay in 6 months without a hedge it the expected spot rate in 6 months is assumed to be Won1 ,1 101$? Won1,173/$? b. How much in U.S. dollars will Bobcat pay in 6 months with a torward market hedge? c. How much in U.S. dollars will Bobcat pay in 6 months with a money market hedge? 1| Hntu mIII-k in I I Q dnllure tuill nhrnt nun in I: mnn'h: uni'h an nntinn hadnn H H1: nvnndnd :nnt ml: in R mnnth: i: unarmed tn he Ian: than Wnnl arm/:5 Tn he Wnn'l Innl a. How much in U.S. dollars will Bobcat pay in 6 months without a hedge it the expected spot rate in 8 months is assumed to be Won1 ,1 101$? 5 657657658 (Round to the nearest cent.) How much in U.S. dollars will Bobcat pay in 6 months without a hedge if the expected spot rate in 6 months is assumed to be Won1.173/$? 5 E2233581 (Round to the nearest cent.) b. How much in U.S. dollars will Bobcat pay in 6 months with a tomard market hedge? 5 622335691 (Round to the nearest cent.) c. How much in U.S. dollars will Bobcat pay in 6 months with a money market hedge? 5 573510227 (Round to the nearest cent.) d . How much in U.S. dollars will Bobcat pay in 6 months with an option hedge it the expected spot rate in 6 months is assumed to be less than Won1,200/$? (Round to the nearest cent.) 5 How much in U.S. dollars will Bobcat pay in 6 months with an option hedge ifthe expected spot rate in 6 months is assumed to be Won1,300/$? 5 (Round to the nearest cent.) a. What do you recommend? (Select from the drop-down menu.) The forward market hedge provides the lowest certain cost hedging method for payment settlement