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Tek has imported components from its joint venture in Japan, Sony-Tek, with payment of 8,000,000 due in 6 months. Citibank has offered Tek the following
Tek has imported components from its joint venture in Japan, Sony-Tek, with payment of 8,000,000 due in 6 months. Citibank has offered Tek the following quotes Assumptions Account payable to Japan Sony-Tek, in Japanese yen () Spot rate (\/$) 6-month forward rate ($) 6-month yen deposit rate 6-month dollar interest rate 6-month call option on yen: Strike rate (\/$) Premium, percent per year Tek's weighted average cost of capital Values 8,000,000.00 108.20 106.20 1.250% 4.000% 108.00 2.500% 9.800% What are the cost and risk of each alternatives? Tek has imported components from its joint venture in Japan, Sony-Tek, with payment of 8,000,000 due in 6 months. Citibank has offered Tek the following quotes Assumptions Account payable to Japan Sony-Tek, in Japanese yen () Spot rate (\/$) 6-month forward rate ($) 6-month yen deposit rate 6-month dollar interest rate 6-month call option on yen: Strike rate (\/$) Premium, percent per year Tek's weighted average cost of capital Values 8,000,000.00 108.20 106.20 1.250% 4.000% 108.00 2.500% 9.800% What are the cost and risk of each alternatives
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