A European borrower borrows $5,000,000 from an American bank for one year The interest rate is 7 The exchange rate at the start of the year is $258 and is $215 at the end of the year What is the European borrowers EUR denominated equivalent cost of borrowing Please answer in PERCENT form Hint This ...

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A European borrower borrows $5,000,000 from an American bank for one year. The interest rate is 7%.

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A European borrower borrows $5,000,000 from an American bank for one year. The interest rate is 7%. The exchange rate at the start of the year is $258/ and is $215/ at the end of the year. What is the European borrowers EUR-denominated equivalent cost of borrowing? Please answer in PERCENT form.

Hint: This is similar to computing a $-denominated equivalent cost of borrowing for a U.S. firm.

Posted Date: Jul 11, 2024 12:13 AM

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A European borrower borrows $5,000,000 from an American bank for one year. The interest rate is 7%.

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