Problem 10-2 (algorithmic) 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 Won7,600 million. Won1,000 million has already been paid, and the rer current spot rate is Wo 1,1 18 , and the 6-month fo ard rate is won 1,161/S. The 6 th Korean won inte est rate is 16.5% per annum, the us dollar rate s 3% per annum. Bobcat ca invest at these interest rates, or borrow at 2% per annum above those rates. A 6-month call option on won with a oni 200 strike rate has a 36% premium, while the 6-month put option at the same strike rate has a 3.1% premium. Won6,600 million is due in six months. The Bobcat can invest at the rates given above, or borrow at 2% per annum above those rates. Bobch ways below that Bobcat might deal with its foreign exchange exposure. s weighted average cost of capital is 10.5%. Compare alternate a. 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 Won1,118/5? Won1,161/5? b. How much in U.S. dollars will Bobcat pay in 6 months with a forward market hedge? c. How much in U.S. dollars will Bobcat pay in 6 months with a money market hedge? d. How much in U.S. dollars will Bobcat pay in 6 months with an option hedge if the expected spot rate in 6 months is assumed to be less than Won1,200/$? To be Won1,300/s? e. What do you recommend? a. How much in U.S. dollars will Bobcat pay in 6 months without a hedge if the expected spot rate in 6 months is assumed to be Won1,118/$? (Round to the nearest cent.)