A U.S.-based subsidiary wants to raise $5 million by issuing a 10-year bond denominated in Canadian dollars.

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The current exchange rate of the Canadian dollar is $.75.

(1) How many Canadian dollars are needed to raise the $5 million?

(2) Is the Canadian dollar expected to appreciate or deprepciate if the exchange rate is forecasted at $.73?

Related Book For answer-question

Fundamentals of Corporate Finance

ISBN: 978-0078034640

7th edition

Authors: Richard Brealey, Stewart Myers, Alan Marcus

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Posted Date: Jul 08, 2021 08:45 AM

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A U.S.-based subsidiary wants to raise $5 million by issuing a 10-year bond denominated in Canadian dollars.

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Fundamentals of Corporate Finance

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