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1. Trident Company, U.S. -based manufacturer of industrial equipment, just purchased a Korean company that produces plastic nuts and bolts for heavy equipment. The purchase

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1. Trident 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 Won650 million. Won100 million has already been paid, and the remaining Won550 million is due in six months. The current spot rate is Won1, 110/$, and the 6-month forward rate is Won1, 135/$. The 6-month Korean won interest rate is 8% per annum, the 6-month U.S. dollar rate is 6% per annum. Trident can invest at these interest rates, or borrow at 2% per annum above those rates. A 6-month call option on won with a 1210/$ strike rate has a 3.0% premium, while the 6-month put option at the same strike rate has a 2.4% premium. Trident's weighted average cost of capital is 9%. Compare alternate ways that Trident might deal with its foreign exchange exposure. What do you recommend and why

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