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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
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
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