Minnie Corp.has decided to issue three-year bonds denominated in 5,000,000 Slovakian koruna (SKK)at par.The bonds have a coupon rate of 17%.If the koruna 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

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The financing cost is the yield to maturity, which is the internal rate of return on the bond. To calculate the yield to maturity, we need to find the present value of the bond's cash flows. The cash flows are the coupon payments and the principal repayment. The coupon payments are 17% of 5,000,000 SKK = 850,000 SKK. The principal repayment is 5,000,000 SKK.The present value of the cash flows is:PV = 850,000 / (1 + r) + 850,000 / (1 + r)^2 + 850,000 / (1 + r)^3 + 5,000,000 / (1 + r)^3where r is the yield to maturity.We can solve for r using a financial calculator or spreadsheet. The yield to maturity is 23.39%.