New Hampshire Corp

Multiple Choice

New Hampshire Corp. has decided to issue three-year bonds denominated in 5 million Russian rubles at par. The bonds have a coupon rate of 17 percent. If the ruble is expected to appreciate from its current level of $.03 to $.032, $.034, and $.035 in years 1, 2, and 3, respectively, what is the financing cost of these bonds?

A) 17 percent
B) 23.18 percent
C) 22.36 percent
D) 23.39 percent