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AN EXAMPLE OF A MULTINATIONAL COMPANY ENTERING A NEW FOREIGN DIRECT INVESTMENT BASED ON REVENUE MOTIVES a

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1. AN EXAMPLE OF A MULTINATIONAL COMPANY ENTERING A NEW FOREIGN DIRECT INVESTMENT BASED ON REVENUE MOTIVES

2. a. Whale Watching Limited issued 14-year bonds one year ago at a coupon rate of 6.9 percent. The bonds have a face value of $200 000 and make semi-annual payments. If the YTM on these bonds is 5.5 percent, what is the current bond price? (5 marks) b. If you expect the future inflation rate is low in next 3 years, what characteristics of the straight bond will have a better performance?