Marks Co. (a U.S. firm) considers a project in which it will establish a subsidiary in Zinland,
Question:
(a) Obtain a dollar-denominated loan and convert the loan into zin, or
(b) Obtain a zin-denominated loan, or
(c) Obtain half of the funds needed from each possible source? [Assume that the interest rate from borrowing zin is the same as the interest rate from borrowing dollars.] Briefly explain.
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