General Motors, American-based company that has raised money by issuing a Swiss franc-denominated Eurobond with fixed...
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General Motors, American-based company that has raised money by issuing a Swiss franc-denominated Eurobond with fixed semiannual coupon payments of 2% on 250 million USD in five years. Otherwise, it can borrow 250m USD 5% fixed rate at Bank of America. Spot rate 1USD=1.22 CHF A. Calculate the present value of CHF bond (2marks) B. Calculate the actual USD that could be save from swap (2marks) C. Calculate the actual interest rate GM pay (2marks) General Motors, American-based company that has raised money by issuing a Swiss franc-denominated Eurobond with fixed semiannual coupon payments of 2% on 250 million USD in five years. Otherwise, it can borrow 250m USD 5% fixed rate at Bank of America. Spot rate 1USD=1.22 CHF A. Calculate the present value of CHF bond (2marks) B. Calculate the actual USD that could be save from swap (2marks) C. Calculate the actual interest rate GM pay (2marks)
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AThe present value of a bond is equal to the face value multiplied by the present ... View the full answer
Related Book For
Fundamentals of Corporate Finance
ISBN: 978-1259024962
6th Canadian edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus, Devashis Mitra, Elizabeth Maynes, William Lim
Posted Date:
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