of the Singapore dollar is $ 50 . Seminole has forecasted the Singapore dolar's value at the end of each of the next four years , when coupon payments are to be paid End of Year Exchange Rate of Singapore Dollar 8.52 53 Determine the expected annual cost of financing with Singapore dollars . Should Seminole , Inc . issue bonds denominated in US dollars or Singapore dollars ? Explain ANSWER End of Year So payment 851 400 000 S$1 400.000 851 400 090 9821 400,090 Exchange rate 5.52 8.56 5.58 $53 8 payment 5728 090 $784.000 $812090 $11 342090 The annual cost of financing with SS Is determined as the discount rate that equates the U.S dollar payments resulting from payments on the Singapore dollar - denominated bond to the amount of US dollars borrowed . Using a calculator (IRRI , this discount rate is 8 97% . Thus , the expected annual cost of financing with a Singapore dollar - denominated band Is 8 97% which is less than the 129 % cost of financing with US dollars , However , there is some uncertainty associated with Singapore dollar financing . Seminole ne , must weigh the expected savings from Financing in Singapore dollars with the uncertainty associated with such financing