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A Japanese firm borrows 10,000,000 to make improvements to a German tire factory. The euro interest rate is 2.40% per year and the Euro Yen
A Japanese firm borrows 10,000,000 to make improvements to a German tire factory. The euro interest rate is 2.40% per year and the Euro Yen rate goes from 100/ at the time of the loan to 110/ at the end of the first year of the loan.
What is the before tax cost of capital if the Japanese firm repays the entire loan plus interest? (Answer in percent, without a percentage sign, and rounded to two decimals.)
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