Calculate the future us dollar cost of meeting this


A U.S. firm has a debt obligation of ¥ 210 million payable in one year. The current spot rate is ¥ 114 per U.S. dollar and the one-year forward rate is ¥ 108 per U.S. dollar. Additionally, a one-year Call option on the Yen with a strike price of $0.0087 per yen can be purchased for a premium of 0.012 cent per yen. The risk-free money-market rate in Japan is 2.2% and the risk-free money-market rate in the U.S. is 4.1%. Calculate the future U.S. dollar cost of meeting this obligation using a money market hedge.

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Financial Management: Calculate the future us dollar cost of meeting this
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