Assume that Hurricane, Inc., is a U.S. company that exports products to the United Kingdom, invoiced in

Question:

Assume that Hurricane, Inc., is a U.S. company that exports products to the United Kingdom, invoiced in dollars. It also exports products to Denmark, invoiced in dollars. It currently has no cash outflows in foreign currencies, and it plans to issue bonds in the near future. Hurricane could likely issue bonds at par value in (1) dollars with a coupon rate of 12 percent, (2) Danish kroner with a coupon rate of 9 percent, or (3) pounds with a coupon rate of 15 percent. It expects the kroner and pound to strengthen over time. How could Hurricane revise its invoicing policy and make its bond denomination decision to achieve low financing costs without excessive exposure to exchange rate fluctuations?

Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...