Discussion:
Kingdom Enterprises (B): Japanese Yen Debt. Kingdom Enterprises of Hong Kong borrowed Japanese yen under a long-term loan agreement several years ago. The company's new CFO believes, however, that what was originally thought to have been relatively "cheap debt" is no longer true. What do you think?
2008 2009 2010
Annual yen payments on debt agreement (V) 12,000,000 12,000.000 12.000,000
Average exchange rate. V/HK$ 12.3 12.1 11.4
Annual yen debt service, HK$