Mabindisa Ltd can issue $3-$year bonds in either UK Pounds or Swiss Francs. Pounddenominated bonds would have a coupon rate of $15$ percent; Swiss Franc$-$denominated

bonds would have a coupon rate of $12$ percent. Assume that Shumba can issue bonds worth

$15000000$ in either currency, that the current exchange rate of the Swiss Franc is $0\mathrm{.}47,$

and that the forecasted exchange rate of the Franc in each of the next three years is $0\mathrm{.}50.$

What will the annual cost of financing for the franc$-$denominated bonds be$?$ Which type of

bond should Shumba issue?