Question: DVR Inc. can borrow dollars for five years at a coupon rate of 288 percent Alternatively, it can borrow yen for five years at a

 DVR Inc. can borrow dollars for five years at a coupon

DVR Inc. can borrow dollars for five years at a coupon rate of 288 percent Alternatively, it can borrow yen for five years at a rate of 98 percent. The five-year yen swap rates are 0.77-070 percent and the dollar swap rates are 2.54-2.57 percent. The currency W/$ exchange rate is 87540. Determine the dollar AIC and the dollar cash flow that DVR Inc. would have to pay under a currency swap where it borrows $1,750,000,000 and swaps the debt service into dollars. Borrow Swap DVR Inc. can borrow dollars for five years at a coupon rate of 288 percent Alternatively, it can borrow yen for five years at a rate of 98 percent. The five-year yen swap rates are 0.77-070 percent and the dollar swap rates are 2.54-2.57 percent. The currency W/$ exchange rate is 87540. Determine the dollar AIC and the dollar cash flow that DVR Inc. would have to pay under a currency swap where it borrows $1,750,000,000 and swaps the debt service into dollars. Borrow Swap

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