4.) When companies borrow in global debt markets, the cost of debt capital includes the effect of changes in exchange rates. General Electric needs to borrow the equivalent of $100,000 for one year. GE decides to borrow yen, unhedged, in the Tokyo market. The coupon rate is 2%, and the exchange rate on the issue date is \105/$. The exchange rate is\110/S on the day the debt obligation matures. a.) What is GE's before-tax dollar cost of debt capital