QUESTION THREE (6 marks) TT Global (TTG) is an international firm with the parent company in the USA and subsidiaries in several countries. TTG is considering expanding its German operations at a cost of US$100 million. The German affiliate can issue a 10-year, 5100 million bond denominated in euros and priced to yield 75 percent Alternatively, TTG can issue a dollar-denominated bond of the same size and maturity and carrying an interest rate of 6.7 percent a. If the euro is forecast to depreciate by 1.7 percent annually, what is the expected dollar cost of the euro-denominated bond? How does this compare to the cost of the dollar bond? (2 marks) At what rate of euro depreciation will the dollar cost of the euro-denominated bond equal the dollar cost of the dollar denominated bond? (2 marks) Suppose TTG's German unit faces a 35 percent corporate tax rate. What is the expected after-tax dollar cost of the euro-denominated bond? (2 marks)