An MNC Issues Ten-Year Bonds Denominated in 500,000 Philippines Pesos

question 36

Multiple Choice

An MNC issues ten-year bonds denominated in 500,000 Philippines pesos (PHP) at par. The bonds have a coupon rate of 15 percent. If the peso remains stable at its current level of $.025 over the lifetime of the bonds and if the MNC holds the bonds until maturity, the financing cost to the MNC will be:​

• A)10.0 percent.
• B)12.5 percent.
• C)15.0 percent.
• D)none of the above

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