An investor is interested to borrow EUR 1,000,000. Assume that the USD/EUR spot rate is 1.25 and
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An investor is interested to borrow EUR 1,000,000. Assume that the USD/EUR spot rate is 1.25 and the p.a. interest rates are 3% for USD and 4% for EUR. Check that, if the tax rate is 30% and the taxes are neutral, investor is indifferent between a direct EUR loan or a swapped EUR loan. What if investor does not have to pay taxes on capital gains?
Related Book For
Mergers, Acquisitions and Other Restructuring Activities
ISBN: 978-0128013908
8th edition
Authors: Donald DePamphilis
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