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Minnie Corp. a US Company with no other foreign inflows or outflows, has decided to issue three-year bonds denominated in 5,000,000 Slovakian koruna (SKK) at

  1. Minnie Corp. a US Company with no other foreign inflows or outflows, has decided to issue three-year bonds denominated in 5,000,000 Slovakian koruna (SKK) at par. The bonds have a coupon rate of 12%. The company will use US dollars to buy the SKK need to pay off the bonds in years 1, 2 and 3..
  1. If the koruna is expected to appreciate from its current level of $.030 to $.033, $.033, and $.033 in years 1, 2,and 3, respectively, what is the % cost of financing these bonds to the US company.

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  1. If the koruna is expected to depreciate from its current level of $.030 to $.026, $.026, and $.026 in years 1, 2,and 3, respectively, what is the % cost of financing these bonds to the US company.

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