How to estimate the rupiah riskless rate

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Question 1: Assume that you are valuing an Indonesian firm in U.S. dollars. What would you use as the riskless rate?

Question 2: You have been asked to estimate a riskless rate in Indonesian rupiah. The Indonesian government has rupiah-denominated bonds outstanding, with an interest rate of 17%. S&P has a rating of BB on these bonds, and the typical spread for a BB-rated country is 5% over a riskless rate. Estimate the rupiah riskless rate.

Reference no: EM132647034

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