10. Aire Asia. Aire Asia, headquartered in Kunming, China, needs US$25,000,000 for one year to finance working...
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10. Aire Asia. Aire Asia, headquartered in Kunming, China, needs US$25,000,000 for one year to finance working capital. The airline has two alternatives for borrowing:
a. Borrow US$25,000,000 in Eurodollars in London at 7.250% per annum
b. Borrow HK$39,000,000 in Hong Kong at 7.00% per annum, and exchange these Hong Kong dol- lars at the present exchange rate of HK$7.8/US$ for U.S. dollars.
At what ending exchange rate would AireAsia be indifferent between borrowing U.S. dollars and bor- rowing Hong Kong dollars?
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Related Book For 
Fundamentals Of Multinational Finance
ISBN: 9780321541642
3rd Edition
Authors: Michael H. Moffett, Arthur I. Stonehill, David K. Eiteman
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