Question: Please answer 1-3! You will get many thumbs up thanks! enswered Points out of S. A U.S. MNC and a French MNC need to borrow
enswered Points out of S. A U.S. MNC and a French MNC need to borrow for their foreign direct investments. The US.MNCC 10-year bond of 5720 million at 7.5% or 10-year bond of 200 million at 8.25%. The French MNC can issue 10-year bond of $220 million 7.7% 10-yent bond of 200 million at 8.10%. A swap bank quotes the 10-year currency swaps as $7.5%-7.6and 8.1%-8.15% Times New R 5 (16) Format SEEBI 1. Discuss the challenges encountered by the above MNCs in financing for their foreign direct investments. 2. Demonstrate how the above two MNCs benefit from the use of currency swaps. 3. Two years after the initiation of the 10-year currency swaps, Sande interest rates have changed to 7%-725% and 8%-8.425%, and exchange rate changed to $1.27. Calculate the value of the currency swap used by each MNC. Which MNC is willing to unwind the original swap? Explain with calculations. enswered Points out of S. A U.S. MNC and a French MNC need to borrow for their foreign direct investments. The US.MNCC 10-year bond of 5720 million at 7.5% or 10-year bond of 200 million at 8.25%. The French MNC can issue 10-year bond of $220 million 7.7% 10-yent bond of 200 million at 8.10%. A swap bank quotes the 10-year currency swaps as $7.5%-7.6and 8.1%-8.15% Times New R 5 (16) Format SEEBI 1. Discuss the challenges encountered by the above MNCs in financing for their foreign direct investments. 2. Demonstrate how the above two MNCs benefit from the use of currency swaps. 3. Two years after the initiation of the 10-year currency swaps, Sande interest rates have changed to 7%-725% and 8%-8.425%, and exchange rate changed to $1.27. Calculate the value of the currency swap used by each MNC. Which MNC is willing to unwind the original swap? Explain with calculations
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